
ihe Ihings 
That Are Caesar's 

A Defence of Wealth 



By 

GUY MORRISON WALKER 

This volume was neither written nor published for 
profit, but solely in the public service and in the in- 
terest of sound economic thought in protection of the 
future of both labor and capital in the United States. 

"A race oppressed by hunger and cold gave 

little tlwught to the Immortality of the Soul." 

Measure of Civilization, pg. 21. 

"And they sent unto Him saying, 'Master, We know that 
Thou teachest the way of truth, neither carest Thou for any 
man. Tell us, therefore, Is it lawful to pay tribute unto 
Caesar?'" 

"Then said He unto them, 'Render unto Caesar the things 
which are Caesar's.' " 

Fourth Edition^, Abridged 

A, L. FOWLE, 61 BROADWAY, NEW YORK 
PUBLISHER 

Price $.50 



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The Things 
That Are Caesar s 

A Defence of Wealth 

By 
GUY MORRISON WALKER 

Author of ' ' Measure of Civilization, " " Railroads and 

Wages," "Railroad Rates and Rebates,'* 

"Trust Companies," etc. 



"A race oppressed by hunger and cold gave 
little thought to the Immortality of the Soul. ** 

Measure of Civilization, pg. 21. 



"And they sent unto Him saying, ' Master, We know 
that Thou teachest the way of truth, neither carest 
Thou for any man. Tell us, therefore, Is it lawful 
to pay tribute unto Caesar?* " 

"Then said He unto them, 'Render unto Caesar the 
things which are Caesar's.' " 



Fourth Edition {abridged) 

A. L. FOWLE, 61 BROADWAY, NEW YORK 
PUBLISHER 

1922 






n 



I ^ '^::- ^- 



SEP 20 1922 



©CU686204 



m' 









Copyright 

by 

GUY MORRISON WALKER 

1920-1922 

(Permission is granted to news- 
papers and periodicals to reprint the 
subject matter herein in whole or in 
part, but all rights to reprinting as 
a book are reserved.) 




THE NEED OF THE HOUR 

An Introduction 

By Clarence W. Barron 

To the Fourth Edition of "The Things That Are Caesar's" 

EN in democracy must understand the 
foundations of their country, or they and 
their country will perish. Destruction from 
within or without will follow ignorance. 

This book entitled "The Things That Are Caesar's," 
by Guy Morrison Walker, is the clearest elementary 
presentation that has ever been written concerning 
the progress of the world and the uplift of Labor by 
Capital and its earnings and accumulations. 

England swept piracy from the seas, protecting 
human rights in trade and possessions so far as her 
naval arm could reach. 

Because of this protection, she became the financial 
centre of the world's trade ; and the world heaped gold 
upon her shores to go forth again and bring back food 
and clothing in infinite variety. 

The United States, with its freedom for individual 
human initiative and enterprise, spread for the first 
time safe transportation across a continent — a conti- 
nent wider than the Atlantic — created the greatest 
free trade area in the world and lifted human labor 
to a dignity never before dreamed. 

Then wealth in the United States for the first time 
made wealth not for display or fashion, but in a game 
of wealth creation, expanding mutual human service. 

Our country can grow greater and enlarge the bless- 
ings of wealth to the whole world only by protection 
of individual property rights and individual enter- 
prise. 



Economic insanity, denying individual property 
rights and repressing individual initiative and enter- 
prise, arises in Eastern Europe, destroying all govern- 
ment and social order, all safety for persons and prop- 
erty, all currency and credits. The seed corn is eaten, 
the machinery in production and transportation is con- 
sumed and famine and death reap in the fields. 

Ignorant millions fleeing oppression have spread 
social poison into the free industrial system of Amer- 
ici. Radicalism does not spring from viciousness; it 
is created by ignorance. 

The antidote is education — economic education. 
The responsibility for this is with the business men of 
America. More quickly and practically than professor, 
pulpit or press they can spread the truth and show 
that human progress rests upon man individually — his 
individual initiative and enterprise and his individual 
possessions. 

Our material progress has been so great that me- 
chanics, machinery and muscle now lay claim to 
universal rule and possession and deny that creation is 
a matter of mind. 

Above every other nation the United States has had 
goods abundant and cheap because of freedom in de- 
mocracy. 

But the materialism of the present age would seek 
to restrain this freedom, enslave the human unit and 
crush the individual mind, its initiative and power. 

Go forth, "The Things That Are Caesar's," and 
teach men that humanity is one and indivisible and 
goes forward only when brain and hand co-ordinate, 
each in its proper place, and produce the surplus 
above consumption that is called Capital and by which 
alone is material progress ! 
New York, Sept. 15, 1922. C. W. B. 




FOREWORD 
By The Author 

HE problem of Labor and its relation to 
wealth has baffled not only labor agita- 
tors and capitalists but political philoso- 
phers as well. 
The claim is made that Labor alone is responsible 
for the creation of wealth, yet the minute a great mass 
of laborers with socialistic ideas break away from the 
control of their employers and the controllers of 
wealth, they engage in a mad orgy of destruction. 
They destroy not only the material prosperity which 
they claim has been created by their sole efforts but 
without discrimination they destroy monuments, art 
objects, institutions and civilization itself, including 
the moral codes that have been built up thru thousands 
of years of effort to control and inhibit the savage 
instincts of the undeveloped, the ignorant, the vicious 
and the unthinking. 

In Russia, labor has challenged the civilization of 
the world and the apologists and advocates of 
Bolshevism, in the rest of the world and particularly 
here in our own country, have created a situation that 
demands that we search out and prove the economic 
and ethical foundations on which our civilization rests. 
The most fanatical supporter of the labor dogma 
will not pretend that the result in Russia has been to 
the advantage of the laborer. For with the destruc- 
tion of wealth and the wiping out of property has 
come a stoppage of production, the consumption of 
surpluses, hunger, starvation, famine, epidemic, and 
a reversion to savagery, with ruthless assassination 
and massacre, in an effort to secure possession of the 



women of other men, and of the remaining scraps of 
food that they possess. 

Still if wealth cannot justify its existence then the 
Bolshevik movement is entitled to support and the 
laborers of the rest of the world should join the 
movement and destroy all property that exists as an 
evidence of wealth. If on the other hand, wealth 
shall be able to justify itself and if it shall be shown 
that in the absence of wealth, labor starves and that 
only thru the creation of wealth and its conservation 
does labor escape hardship, then let us have an end 
of these attacks upon wealth and let labor submit to 
the direction and control of those who by their direc- 
tion and control of labor not only enable labor to 
secure more for itself than it otherwise would, but to 
pile up those great surpluses which we call wealth 
and which, when used to carry labor thru periods of 
idleness or times during which employment is impos- 
sible on account of physical conditions or to support 
labor thru the construction of projects, the completion 
of which extend over long periods of time, we term 
"Capital"; the use of which in the manner just de- 
scribed has made possible the so-called "Capitalistic 
Civilization," as we know it throughout the world 
today. 

The problems which the world professes to believe 
difficult of comprehension and impossible of solution, 
really become as simple as A B C if reduced to their 
early and primitive forms. 

The belief that in the face of death men dare not 
tell the untrue or utter the false has caused us for 
centuries to give to dying declarations a weight great- 
er even than to statements made under oath. These 
chapters have been written between successive opera- 



tions, and it has been a constant question whether I 
would be able to complete them. My condition has in 
fact compelled me to issue them in their present un- 
satisfactory state, but so far as I have been able to 
determine they contain nothing but the truth. Not 
the whole truth, for that I fear I shall not be given 
time to tell. 

G. M. W. 



The Things 
That Are Caesar s 

A Defence of Wealth 

Chapter I 
THE BEGINNING OF WEALTH 

Primitive Man Produced Nothi7ig 

WO men of the Stone Age, feeling the 
pangs of hunger, picked up their stone 
hammers or axes and started out in 
search of food. They had hunted so long 
in the region of their cave that they had destroyed 
most of the game that formerly roamed near their 
habitation, and they now found that they were com- 
pelled to go farther and farther before finding any- 
thing to eat. On this particular occasion they had 
travelled and hunted for two days without making 
any kill, when good fortune brought them across a 
doe with its fawn. Starting in pursuit they soon 
captured the fawn while the doe bounded away. In 
their crude savage way they divided the little beast 
between them and proceeded to satisfy their hunger 
by consuming all they could hold of the little animal. 




A DEFENCE OF WEALTH 



Having finished their meal the younger of the two 
men dropped what remained of his half on the ground 
and went off to a nearby stream to quench his thirst, 
but the older of the two with a memory of his two- 
day hunger still upon him could not bring himself to 
throw away what was left of his half, and looking 
over his head saw a fork in the tree under which he 
had been eating, and leaping high he dropped the 
remaining meat in the forked branches and followed 
his companion to the stream. 

As soon as he quitted the spot where he and his 
companion had fed, the hungry wolves rushed to the 
spot and quickly devoured the offal and the meat 
abandoned by the younger man, but leaping high 
in their efforts to reach the piece deposited in the fork 
of the tree by the older man they failed and soon 
abandoned their efforts. After sleeping the two men 
began again their pursuit of game and their search 
for food. But they found it extremely scarce and the 
second day afterward they found themselves again 
oppressed with the pangs of hunger. Then the older 
man remembering that he had deposited what was 
left of his half of the fawn in the fork of the tree, 
said: "Instead of hunting farther for fresh game I 
am going back to the food I left in the tree," and the 
younger man not knowing what else to do followed 
his elder. Hunger hurried their steps and it took but 
a day to get back to the spot from which they had 
spent two days in wandering. Arriving there the 
older man found his meat safe in the tree and leaping 
up he seized it and proceeded to satisfy his ravenous 
hunger. The younger man demanded his share but 



THE BEGINNING OF WEALTH 



the older man growled in reply that they had divided 
the fawn originally and that he had saved what was 
left of his half while the younger man had thrown 
away what was left of his. 

The skill and strength of the older man made it 
unwise for the younger man to attack the older one 
as he felt an instinct to do, and so he began to beg, 
saying to the older man, "Give me half of the meat 
that you have saved and when my hunger is satisfied 
and my strength renewed I will go hunting and give 
you half of my next kill." But the older man ate on 
until finding his own hunger satisfied and some meat 
still remaining, said to the younger man, **I will give 
you what is left here if you will give me half of your 
next kill even tho it be a grown deer or a buffalo." To 
this the hungry young man eagerly assented, where- 
upon the older man pushed over toward him the 
shoulder of the fawn with the meat remaining on it. 

The saving of the uneaten portion of the fawn was 
the beginning of wealth and the use of it to save the 
starving young man, the beginning of capitalism, 
while the hunting of the younger hunter to repay the 
debt he owed to the older who had fed him when he 
was starving was the beginning of the wage system. 




Chapter II 

GROWTH OF WEALTH 

Why Should We Starve? 

NOTHER cave man finding some fruit in 
the forest ate what he could and carried 
a branch laden with it back to his cave. 
Dropping it on the bare rocks in front of 
his cave, he found that the heat of the sun had 
withered the fruit, and though its taste was changed 
it was still palatable and remained so for days. This 
discovery enabled him to add dried fruit to his diet 
through the months when fruit did not grow and the 
trees were bare. 

Another cave man found a strange grass standing 
though dead and yellow, and as he walked through it 
he noticed that the rattling heads shook open and 
scattered seeds about on the ground. Picking up a 
few he ate them and found them strangely nourishing. 
He gathered handsful of the standing stalks and beat 
the contents out of the heads against a rock. He 
gathered up the grains and carried them back to his 
cave, to supplement the dried meat and the dried fruit 
that he had already learned to preserve. 

Another primitive man found a strange looking 
rock and attempting to shape it into a stone imple- 
ment, he found that it yielded to the stroke and that 

4 



THE GROWTH OF WEALTH 



under continuous hammering it grew flat and became 
a tool that gave him a considerable advantage over 
his fellovv^s, v^ho thereupon began to search for similar 
looking stones, that they might fashion for themselves 
similar instruments and put themselves on an equality 
v^rith him. 

Most of these discoveries soon became known to 
others of the race, and the conditions of living for 
most of mankind became easier. Some instead of 
continuing to hunt for deer, and sheep, and goats, and 
buffalo, protected the herds and domesticated them 
and kept them near at hand to kill whenever they were 
wanted for food. 

The standard of living for the race steadily in- 
creased as first one man and then another learned 
how to get more out of the earth, whether it was from 
the game, or the flocks and herds, that fed on the 
lands, or whether it was the grains planted in the cul- 
tivated soil, or the metals that were dug from beneath 
the surface or melted out of the rocks. 

Now much of the earth's surface was unfit for 
human habitation under primitive conditions, and 
was therefore absolutely without value to the race 
until it had learned how to overcome the disadvantages 
of nature. Forests were of no use for man until some 
man invented an axe with which it was possible to 
chop down the trees. But the rude houses that primi- 
tive man built out of unhewn logs were a great waste 
of timber, though it made possible the cultivation of 
the land in which the trees had grown which was rich 
from hundreds of years of dropping leaves. 

But another man invented a saw and it became 



A DEFENCE OF WEALTH 



possible to build many houses out of the logs that 
had formerly been used to build one. And by locking 
the ends of these planks together, as you lock the 
fingers of one hand into the other, it was possible to 
mortise these planks into bins and receptacles for the 
saving of food. 

Only when you have seen the stone work of primi- 
tive man and have seen how by laborious rubbing of 
one stone upon another he made the edges fit, can you 
realize how much more it became possible for man 
to do when he discovered iron, and learned how to 
temper it, and could chisel a stone into form in a few 
hours, where it had formerly taken days and weeks 
to accomplish the same result. 

All of these discoveries and inventions inured to the 
benefit of such of the race as were able or willing to 
use them. Some men built houses and abandoned 
their caves, and as they cut down the forests they 
turned them into pastures and moved their flocks and 
herds into places of less danger. They cultivated the 
valleys and raised more grain than they could eat. 

They piled up surpluses of grain and increased the 
size of their flocks and herds. With food in storage 
some of these men began trying strange things. They 
found that they could make tools of better design 
and greater hardness and keener edges, than they had 
been able to make before. 

With their improved tools, their labors, both of 
farming and of mining and of lumbering, were mate- 
rially lightened, and their output in proportion to the 
physical effort involved was greatly increased. 

Because of the use of their improved tools which 



THE GROWTH OF WEALTH 



made possible the production of so much more from 
these lands with the same effort that they formerly 
expended merely to secure a livelihood for themselves, 
their lands came to be considered desirable and 
whereas with their primitive tools they had been barely 
able to feed themselves by their utmost efforts, they 
were now, by these inventions and devices able with 
the same effort not only to feed themselves with ease 
but to produce enough to feed in the same manner at 
least a score of others. 

The surplus of every one willing to work increased, 
and as it increased, he exchanged part of his surplus 
for things devised by others that he thought would 
be useful to him, and sometimes for things that had 
no particular use but which seemed to him to be de- 
sirable. One bartered some of his surplus to others 
in exchange for their help in building himself a larger 
and stronger habitation and greater storehouses in 
which to keep his increasing surplus production, which 
was made possible by his use of the devices and in- 
ventions of other men, and of the strangely efficient 
tools and utensils that they produced. 

Some traded what they had for metal weapons and 
tools that they could carry easily and went on trips 
of adventure, returning to tell of wild men who had 
never seen metal weapons but who had so many skins 
of wild animals that it was no distinction to be dressed 
in furs. They told that these wild men were willing 
to trade all the fur that one could carry for a single 
metal spear-head. Others, who travelled in other 
directions, returned with cloths of weaves and colors 
that they had never seen before. 



8 A DEFENCE OF WEALTH 

Those who returned reported that in these distant 
places some products that were scarce and highly 
prized at home were strangely common, while other 
things which they regarded as common were very 
scarce and strangely prized. These reports caused 
men to question whether they had properly prized 
what they themselves had or whether they had not 
been willing to trade over much for many things that 
were comparatively worthless. 

It was, however, impossible to get men to agree on 
what was more desirable. Some wanted one thing 
while others preferred another. Some cared for 
nothing but to fill their bellies and after gorging 
themselves refused to hunt or to work either for 
themselves or for anyone else until hunger compelled 
them. Others remembering their past experiences 
refused to gorge themselves but ate sparingly and 
carefully saved the rest. Some insisted that caves and 
tents were good enough for anybody, but others 
laboriously gathered together stones and built homes 
for themselves on spots of their own choosing instead 
of looking for a cave where they could find it. Some 
finding a cave that they desired already occupied 
would fight the occupant for its possession, while 
others claimed that it was foolish to run so great a 
risk as getting killed in a fight when you could build 
yourself a cave with no danger and with but little 
more effort. 

Some refused to plant grains and insisted that it 
was less effort to hunt for and gather the wild grains 
than it was to put so much labor in cultivating a field. 

Others refused to waste their time in protecting a 



THE GROWTH OF WEALTH 



domesticated flock of sheep when there were plenty of 
goats to be had by hunting a little further away. They 
also insisted that the flavor of the wild meat was bet- 
ter, and they charged that the keepers of flocks were 
weak and cowardly and really kept the tame sheep 
because they were afraid of the dangers of the hunt. 

But as time rolled on it was noticed that the men, 
who kept the domesticated flocks and who spent their 
labor cultivating fruits and grains instead of hunting 
for them, ate more regularly, grew stronger, and mul- 
tiplied more rapidly, than did those who depended 
upon the chance of the chase or luck in hunting. 

What was more surprising was that while the 
cultivators of the soil and the keepers of the flocks 
multiplied rapidly, their flocks and stores of grain 
multiplied even more rapidly. On the other hand, 
while the hunters remained few, their supply of game 
steadily diminished and the wild fruits and wild grains 
became almost extinct. At last the returns of hunting 
became so scant that the hunt instead of being a sport 
became poorly rewarded labor. 

Finally a number of hunters exhausted with several 
days' hunting which had found them nothing, said to 
each other: "Why should we starve here when the 
keepers of the flocks in the valley have so many more 
sheep than they need? It is foolish for us to go hungry 
when sheep are to be had for the taking. For you 
know those domesticated sheep are so tame that they 
do not know enough to run away." 

That night a band of the hunters descended on the 
people in the plain and killed almost all of a flock of 
tame sheep belonging to one of the men in the valley 



10 A DEFENCE OF WEALTH 

and carried back with them into the forests all that 
they could carry of the dead meat. The next morning 
the owner of this flock called together the other keep- 
ers of flocks and showed them what the hunters had 
done. *'They will fall on one of you next and our only 
protection is to unite and send a punitive expedition 
against them, and either to drive them away or kill 
them off. At any rate they must be taught that since 
they preferred to hunt wild sheep instead of doing the 
work of raising tame ones, they must respect the 
rights of those of us who have preferred to put in our 
time raising flocks and herds and fields of grain, in- 
stead of depending on the uncertain rewards of 
hunting." 

This suggestion seemed a wise one and gathering a 
considerable company of the cultivators of grain and 
keepers of flocks, they armed themselves with weapons 
which they had devised for protecting their flocks from 
wild animals, and with strange knives that had been 
modified from those that had been devised for the 
cutting of standing grain. 

When the hunters saw the plainsmen coming against 
them, they were filled with derision that these effemi- 
nate men could think that they had a chance in combat 
against men like themselves inured to the hardship 
of life in the forest and in the mountains. 

But when they came to close quarters the hunters 
found that the keepers of the flocks were able to kill 
them before they could even get close enough to strike 
back. For the plainsmen used new and strange 
weapons that the hunters had never seen before and 
against which they were defenseless. 



THE GROWTH OF WEALTH 11 

It later became known that the men of the plain 
had raised such a surplus of food products that a 
number of them had been able to take their time and 
attention from the raising- of grains and the protection 
of flocks and spend it in devising not only protectors 
against the primitive weapons of the hunters, but new 
weapons that would give them an advantage over those 
who used the old. 

The result of the fight was the almost total extinc- 
tion of the race of hunters. Those who were not killed, 
fled into the forests and were not seen nor heard of 
for a long time, while those who remained were 
captured by the men from the plains and compelled to 
work at the cultivation of fields and the tending of 
flocks for their masters, and while they found the 
labor irksome, they found that it had its compensa- 
tion. For they were able to feed regularly and lived 
in buildings that were far more comfortable than the 
caves and huts of the mountains and forests. * 

The contrast between the conditions of life among 
the hunters and the men who cultivated the fields and 
domesticated the flocks were not the only contrasts. 
Even among the hunters, the man who was the more 
persistent hunter or the more skillful in stalking 
game, accumulated the largest supply of skins, and 
was clothed warmer and had a better bed. His family 
was better fed and his children grew stronger and 
more fearless, than did the children of the lazy or 
indifferent hunters who were always half starved, 
poorly covered, and never had more than a single 
skin to sleep upon. 

Naturally the hunter, who had the largest cave and 



12 A DEFENCE OF WEALTH 

the most skins, was envied by his fellow hunters, who 
declared that he was lucky in hunting and they always 
attributed their own lack of food and of skins to wear 
or to sleep upon to their bad luck. 

The same inequalities prevailed among the men of 
the plain. The man, who by industry and care in- 
creased his flocks and piled up greater stores of grain, 
built for himself larger storehouses and a larger house 
in which to keep his growing family. His children, 
and his children's children, being better fed and better 
housed, were more vigorous physically and intellect- 
ually than those who were not so well fed. They also 
had more time to think and so devised more economical 
and efficient ways of doing things. This still further 
increased their advantage over their fellows and 
enabled them to build protective places for themselves 
and their families and for their stores of grains, and 
their flocks and herds. And because of their greater 
industry and their increased production and of their 
saving and storing away their surplus production, they 
were called by their neighbors, "rich," and the build- 
ings which they had built for themselves and their 
children, and the warehouses in which they stored 
their surplus grains and dressed skins, and cured 
meats, and their flocks, and their herds, were called 
"wealth." 




Chapter III 

WHAT IS WEALTH? 

What One Man Has That Another Man Wants 

RIMITIVE men had no difficulty in decid- 
ing what constituted wealth. Wealth 
among them was whatever one man had 
that another man wanted. It consisted of 
food, of skins, of an advantageously located cave, and 
later, the simple weapons for hunting and crude culti- 
vation, and the utensils and receptacles in which were 
stored and preserved food. 

In the days of Job, the chief idea of wealth consisted 
of flocks and herds ; in the days of the Roman Empire 
it was chiefly lands and slaves to work them and 
stocks of precious metals. 

It is not necessary to trace the progress of material 
civilization whereby the huts of primitive men have 
become the forty-story steel frame buildings of today, 
and the encampments of the early nomads have grown 
into great cities containing millions ; whereby the dried 
venison of the savage has been displaced by millions 
of carcasses in massive cold storage plants ; whereby 
the earthen jar of wheat has been supplanted by great 
elevators, each of whose compartments contains a 
cargo for a trans-atlantic liner; whereby the torch 
has been extinguished in favor of a strange light that 

13 



A DEFENCE OF WEALTH 



is transmitted over wires, and the drum signals of 
the savage have given way to messages transmitted 
by an unknown force through the air and around the 
earth. 

Attempts to define wealth must always be considered 
in relation to the stage of material and intellectual 
development existing at the time the definition is 
attempted. 

Adam Smith, first of English economists to define 
wealth, capital, wages, and the principles under con- 
sideration, defined wealth as consisting "of gold, 
silver, lands, houses, and consumable goods of all 
kind." This definition you will notice is distinctly 
primitive, as it confines wealth to physical material 
things. 

John Stuart Mill, a later and more scientific 
thinker, declared: "Wealth consists of all material 
things produced by human effort." But this definition 
is frankly and plainly British in its character, but it 
introduces the element of human tffort. 

A comparatively unknown English economist, 
Mongredien, says that: "Wealth consists of all those 
objects of human desire produced by human exertion.*' 

Mongredien is the first of economists to call atten- 
tion to the element of desire as separate from use or 
need. But all of these definitions seem deficient. 

The source of all wealth is the soil of this earth. 
And the method of wealth creation is the expenditure 
of human effort upon the surface of the earth, whether 
it be the raising of cattle for food and for hides, or 
the raising of sheep for food and for wool, or the 
raising of grains for food and for oils, or the raising 



WHAT IS WEALTH? 15 

of cotton and flax, and other fibrous plants for the 
manufacture of cloths of various kind, and for manu- 
factured uses, or the cultivation of those worms that 
spin the wondrous fibres that make silk, or the digging 
of clay to build houses with greater ease and facility 
than can be done with stone, or the digging of coal 
to vitrify those brick and make them impervious to 
moisture, or for warmth, or for transforming water 
into steam, or the digging of copper and iron, with 
their many uses, which have made possible what we 
know as modern civilization, or the digging of those 
scarcer and more ductile metals which we call precious, 
of which the race has made many strange uses. 

There is no other source of wealth than the surface 
of the earth itself, and no other means of its creation 
than the transformation of its contents or products 
by human effort into forms useful to and desired by 
mankind. 

But there is no value in the earth's surface except 
as it is used by man, and its value to man is possible 
only in one of two ways, either by men travelling or 
transporting themselves to the place where that par- 
ticular spot of the earth's surface lies, occupying it 
and there supporting themselves on what they can 
produce upon it, or by a few of them going to the 
distant spot, wresting from it that which it has of use 
to mankind and carrying it back to where it can be 
used. This was true in primitive times and it is true 
today. 

Always the limitations of man's ability to transport 
himself to the place where food and other things were 
produced by the minimum effort, or to transport the 



A DEFENCE OP WEALTH 



products of luxurious climes to the place where man 
himself found conditions better suited to his own 
existence, have operated to determine the relative use 
or value of any part of the earth's surface to the race. 

No better illustration exists to show how the wealth 
of a community depends upon its accessibility and the 
possible use of its products, than the Province of 
Sze-Chuan in China. This province with an area of 
over two hundred thousand square miles, being- slightly 
larger than all New England, New York, Pennsylvania 
and New Jersey, combined, occupies one of the richest 
plateaus on the earth. 

Its richness is shown by the fact that it supports 
with ease a population of seventy millions, and has 
within its borders many great and rich cities. With 
this enormous population it actually produces such a 
surplus of wheat that for several years past the price 
of wheat in this province has been only from ten to 
fifteen cents a bushel, averaging about twelve cents. 

Naturally the lands of this province used in the 
production of wheat are valued only in proportion to 
the value of the wheat produced on them. Most per- 
sons on reading this will demand at once to know how 
it is possible for wheat to sell anywhere in the world 
during the past three or four years for as little as 
twelve cents a bushel. But the answer is quite simple. 
The nearest point in this province to the sea is over 
twelve hundred miles up the Yangtze River from 
Shanghai, and between it and the lower reaches of the 
river, where navigation ends, are the famous gorges 
that make the province practically inaccessible. 

Only the most primitive methods of transportation 



WHAT IS WEALTH? 17 

exist between the province and the outside world. Al- 
most its only products that are valuable enough to pay 
the expense of export under present conditions are its 
silks, some of the finer grades of fur, and vegetable 
wax. 

It actually cost last year $1.25 a bushel to transport 
wheat from the Province of Sze-Chuan down to 
Shanghai, a distance averaging, say, fourteen or fifteen 
hundred miles. So that the wheat that was worth only 
twelve cents a bushel in Sze-Chuan actually cost $1.37 
a bushel by the time it reached Shanghai. 

Now, if it were possible to build a railroad even from 
the head of navigation on the Yangtze River, up to 
and through the wheat raising regions of this province, 
so that the wheat of Sze-Chuan could be brought down 
to tide-water at a cost of fifteen cents a bushel, as is 
the wheat of Kansas and Nebraska, it would raise the 
price of wheat in Sze-Chuan from twelve cents a 
bushel to $1.25 a bushel. And the wealth of the 
province would be increased ten-fold, because its land 
would increase in value in proportion to the increased 
income received from the sale of its products. 

In the same way, Chinese coal has been produced 
for years by Chinese labor so that it could be bought 
at the mouth of the mines for twenty-five or thirty 
cents a ton, but the absence of cheap methods of trans- 
portation and distribution, has made the mines practi- 
cally valueless because there was little use for the coal. 

Coal produced at Chinese mines at a cost not to ex- 
ceed twenty-five cents a ton was raised by the mere 
cost of transportation by primitive methods to eighteen 
or twenty dollars a ton by the time it reached Shanghai. 



18 A DEFENCE OF WEALTH 

From the fact that the inhabitants of this isolated 
province in China have maintained a practically sta- 
tionary condition of civilization for hundreds of years 
and have devised no means to remove from themselves 
the handicap of isolation and remoteness, it is plain 
that among their population at least the peculiar 
quality of brains, resourcefulness, or inventive genius, 
that is necessary to make their province accessible, and 
to make possible the marketing in other parts of the 
world of their surplus production, does not exist. 

If the income of its people is to be increased and 
their standard of living raised, and their virealth multi- 
plied, it must be by some man outside of the province 
and not directly interested in the increase of the wealth 
and income of its people. But is there anyone who 
will dare to say that that person, or group of persons, 
that supplies cheap modern transportation into and 
out of that province, even though they never expended 
an ounce of physical effort therein, has had and can 
have nothing to do with the creation of the increased 
wealth of the province and with the increased income 
and wages of its inhabitants? 

For thousands of years it was the practice of the 
Race to appropriate without compensation, the de- 
vices invented by individuals with unusual gifts, and 
as a result men with extraordinary gifts could little 
afford to exercise them. Men created only those things 
in which other men recognized their creative effort 
and in which they acknowledged their property rights. 

If an individual raised a sheep or a hog his fellows 
recognized that sheep or hog as belonging to him, but 
if he devised a loom or a spinning wheel, they appro- 



WHAT IS WEALTHr 19 

priated his idea v/ithout even a word of thanks. It 
was, therefore, more worth while for the individual to 
raise cattle and sheep and hogs or grains than it was 
to devise new tools, or machines, for human use. 

Now the reason for this was that the great mass of 
mankind is unable to conceive of property in any other 
than the physical sense, and as long as the mass of 
the race could only think property in physical terms, 
it of course conceived wealth only in physical terms 
and defined it only as having physical, visible and 
tangible attributes. 

It has taken thousands of years for even the intel- 
lectuals and speculative philosophers to be able to 
think of a mortgage or a lien as being property the 
same as farms or hogs. 

It has taken the world thousands of years to realize 
that it is just as wrong to rob a man of his ideas or 
^ devices as it was to steal from him his horse or the 
trees off his land. 

This is not because there is any difference in the 
ownership of an idea or a device, and the ownership 
of lands and the things that grow on lands ; there is no 
difference in the moral quality of stealing a man's 
horse or of stealing a man's ideas and devices. It is 
simply that the human mind in its mass action has been, 
and is yet, unable to conceive of property in ideas be- 
cause so few of them ever had any ideas themselves, 
but they are quite certain of the moral wrong of 
stealing food, or household furniture, or clothes, for 
everybody has at one time or another lost some of 
these things or had some of them stolen from him. 

It was not until 150 years ago when the world for 



20 A DEFENCE OF WEALTH 

the first time began to realize the unique value of 
ideas, and to see the necessity of recognizing the 
property rights therein of those who had them, that 
we began the wonderful period of inventions that have 
made the past 150 years — years of greater progress in 
a physical and material way than all the thousands of 
years since the creation of the Race up to that time. 

With all the vast supply of human labor working 
constantly from the beginning of time down to the year 
1780, it had been able to accumulate only a surplus of 
production over consumption in all these thousands of 
years, that made the total wealth of the world at that 
time, approximately, 100 billion dollars. 

Remember, that up to this time, mankind had denied 
proprietary or property rights in ideas and devices, 
and had recognized property rights only in physical 
things, produced by physical human labor. But at 
that time the Race for the first time began to recognize 
property rights of individuals in their ideas and their 
devices with the result that in the past 140 years, human 
intellect and human brains, have been so devoted to 
the devising of new things, new machinery, new 
methods, new uses, the discovery of new forces, the 
developing of the science of transportation as we now 
know it, and of the science of communication as it now 
exists, with the result that human physical labor, which 
has not so greatly increased over what it was 140 
years ago, supplemented, guided and for the first time 
directed by human brains, actively exercised in the 
science of production, has so enormously increased 
not only the per capita production of the individual, 
but the aggregate production of the whole Race, that 



WHAT IS WEALTH? 2] 

the wealth of the world today is, approximately, 1,000 
billions of dollars. 

In other words, since the time when the race recog- 
nized the property rights of ideas and devices, and the 
productive value of intellectual effort, the wealth of 
the world has grown in 140 years to be ten times what 
it had grown to be from the beginning of the race up 
to the period when intellectual values were recog- 
nized. 

It is in this respect that the previous definitions of 
wealth are deficient, and it is plain that any scientifi- 
cally correct and ethically true definition of wealth 
must recognize and include this intellectual element 
that enters into wealth creation. 




Chapter IV 

THE CREATORS OF WEALTH 
Not Labor but Brains 

HE world has not been without great minds 
in the past, but Solon and Lycurgus, 
though great law-givers were unable to 
invent the steam engine. Socrates, Plato, 
and Confucius, were great in the realm of ethics and 
metaphysics but they were unable to conceive elec- 
tricity. Archimedes, Aristotle and Caesar, founded 
mechanics, logics and military engineering, but they 
were unable to invent the telegraph, the telephone or 
armor plate. Galileo, first conceived of our solar 
system, but he never dreamed of the mechanical de- 
vices of these times with which we measure the dis- 
tance and light of the stars and determine the metals 
that constitute their physical makeup. 

Social philosophers have ignored the most extraordi- 
nary thing that makes for human inequality, and that 
is, the diversity of ability and quality in the human 
mind. Hundreds of thousands of ordinary brains put 
to work on the identical problem can not solve it un- 
less the problem be one within the comprehension of 
any single one of those thousands of ordinary minds. 
And, if it is within the understanding and compre- 
hension of any one of those thousands of ordinary 

22 



THE CREATORS OF WEALTH 23 

minds, any one of them is just as good for the solving 
of that problem as the united efforts of the hundreds 
of thousands. But if the problem be beyond the un- 
derstanding and comprehension of the ordinary mind it 
must wait for its solving for the rare appearance of 
one of those great minds of unique quality, who is 
able to solve it and who it sometimes seems is born 
for the purpose of solving it. One who when sent 
solves it for the benefit of the whole race. Those extra- 
ordinary brains constitute such a rare treasure for the 
world that when they appear the world should subsi- 
dize them and reduce their struggle for existence to a 
minimum so that these extraordinary brains can devote 
their whole energy to the intellectual effort of solving 
the heretofore unsolved problems of the race. 

With all the great minds that the world has had 
from the beginning of time, it labored along with only 
man-power and animal-power, until Watt discovered 
the expansive force of steam, and substituted steam- 
power for man-power. With all the great minds of 
the past, the world had to go along without steam loco- 
motion until the extraordinary brain of Stephenson 
began the annihilation of space that is now well nigh 
accomplished. With all the great minds of the past, 
the human race was only able to invent a written record 
for itself about 5,000 years ago, and so we know 
nothing of the history of the race for the hundreds of 
thousands of years thru which it struggled up until 
then. 

For nearly 5,000 years, the only way its greatest and 
best minds were able to make such a record was to 
chisel a few inscriptions in clay or on the face of stone, 



24 A DEFENCE OF WEALTH 

or to laboriously transcribe them by hand on skins and 
barks. With the reproduction of books possible only 
by long-hand transcription, it was impossible for 
knowledge to become diffused or for education to be- 
come general. Not until Gutenberg and Faust adapted 
the Chinese art of printing to European alphabets was 
it possible for the carefully copied ideas of the world's 
best minds to become generally distributed. 

With all the great minds that the world has pro- 
duced the race struggled along in physical darkness 
while fear and superstition peopled the night with 
demons and ghosts, until a Rockefeller made artificial 
light possible to the poorest being on earth, by the 
economical production and cheap and general distribu- 
tion of petroleum, which in its turn is now being super- 
seded in all civilized communities by electric lights, 
which are being constantly improved until it is now 
almost a scientific fact that they rival the light of 
day. 

With all the great minds of the past, the world 
never realized the necessity or possibility of a pure 
water supply or the epidemic infections due to water 
contamination that decimated cities and killed millions, 
until modern bacteriology was discovered. And this 
knowledge has not yet become the possession of two- 
thirds of the population of the earth, for the millions 
of people in Africa and in India and in China are still 
without pure v/ater and suffer terribly from epidemics 
that are now no longer known in Europe and Amer- 
ica. Contagion and infection are so little under- 
stood that the populations of Egypt, India, China and 
the Philippines, absolutely refuse to recognize the 



THE CREATORS OF WEALTH 25 

attempts of modern administrators to enforce quaran- 
tine. 

When you consider the attitude of the best educated 
men toward labor from the beginning of the race until 
the middle of the 18th Century, it is not surprising 
that statesmen and historians regard wealth as purely 
material. 

Through all this long period the labor of the race 
plodded clumsily along, undirected by its men of extra- 
ordinary ability, for it was considered beneath the 
dignity of intellectuals to interest themselves in such 
material things as production or the creation of wealth. 

Until this time intellectual effort was therefore con- 
fined to the writing of religious works, theological 
speculations, histories, annals, and the production of 
poems. Until comparatively recent times it w^as con- 
sidered a gross prostitution of mental abilities for a 
man of education and brains to write a novel, or to 
record events of other than political or moral signifi- 
cance. 

The primitive attitude of the intellectual and edu- 
cated men toward labor and production is nowhere 
better exemplified than in the exaltation of formal 
literature by Chinese scholars and statesmen down to 
the overthrow of the Manchu Dynasty in 1911. 

Europe has but slightly broken away from its preju- 
dice against the participation in industrial production 
or trade of its educated men, and only the knowledge 
of the extraordinary rewards that have followed the 
exercise of intellectual effort in this direction in our 
country, has induced some to defy the prejudice 
against it that still exists throughout Europe. 



26 A DEFENCE OF WEALTH 

Not until comparatively recent times has intellec- 
tual effort been directed toward industry, production, 
and the creation of what we recognize as wealth. It 
is barely 200 years since the first engine was devised 
as a toy, but it was not until 1780 that Watt devised 
the first real operative steam engine, began the revolu- 
tion in labor saving modern industry and inaugurated 
a new era of production and wealth creation. 

As we look back over the record of human accom- 
plishment from the beginning of human records up 
until 1780, we are not so much astonished at what the 
Race accomplished, as we are appalled by the prodigal 
waste of human energy and the reckless spending of 
human life in doing it. 

The "Pyramids" are a wonderful monument of hu- 
man labor but it is appalling to think of the expendi- 
ture of human energy and the waste of human lives 
expended in their creation. Every stone in those 
Pyramids was cut by human hands from the quarries, 
moved from their place to the site of the Pyramids by 
human labor, and raised to the place where they now 
rest by human energy. 

The "Great Wall of China," remains one of the 
wonders of the world, but when you think that every 
one of its bricks was made by human hands, trans- 
ferred to its place by human labor, and that not one 
single labor-saving device such as we now know, was 
used in the erection of this monumental wonder, you 
cannot help but be oppressed by the thought of the 
milHons who were driven to its erection. 

The same thing is true of the "Canals of China," 
the canals and so-called "wells" or "tanks" of India, 



THE CREATORS OE WEALTH 27 

the enormous structures raised as temples to appease 
the angry gods, and this includes the wonderful 
cathedrals of Europe. 

This country of ours is the only one on the face of 
the earth unmarked and unmarred by any gigantic 
structure raised by undirected, unrewarded, human 
labor. 

In 1782, when the Independence of our country was 
recognized, two years after the invention of the steam 
engine by Watt, the entire wealth of the world was 
not over 100 billion dollars. This represented the 
entire unconsumed surplus created by the undirected 
labor of the race, from its beginning up to that time, 
and the values of the used lands of the earth based 
on their then use by the peoples of the earth. 

I do not intend to enter into a discussion of the in- 
crease in the standards of living, or the relative values 
of human life, now and 140 years ago. But I wish to 
call your attention to the fact that at that time there 
was practically no house on earth with glass windows ; 
that ventilation, sewerage, and pure water supply were 
unknown ; that education was within the reach of but 
few and was still entirely classical and religious in its 
character. That the largest ship in the world at that 
time (1782) was the then newly built English Battle- 
ship, the ^'Victory," the flagship of the famous Lord 
Nelson, which measured 186 feet in length. The largest 
ship that sailed in trade between Europe and the 
American Colonies before our Revolution was 120 feet 
long, 34 feet beam, with a tonnage of about 600. 

The founders of our United States realized as had 
no other political thinkers in the world before, the 



A DEFENCE OF WEALTH 



value of men's brains in production. From the first, 
we have recognized to a degree unequalled by any- 
other nation or people, the property rights of men in 
their inventions, devices, and ideas, v/hile by our al- 
most immediate and universal use of such inventions, 
devices, and ideas we have made it worth while for 
our intellectuals, our men of brains and of genius, to 
devote themselves to that character of human effort, 
namely, intellectual, that has enabled labor in this 
country by seeking and accepting the aid, direction 
and leadership of our best brains, to reach a unit of 
per capita production that has never been dreamed of 
by the peoples of any other country in the world, 

I have called attention to the fact that the values 
of lands on the earth depend on their accessibility. 
This was well known and recognized by the men who 
undertook the development of this country. 

The first ship not driven by human hands or the 
winds was Rumsey's steamboat that made a success- 
ful trial on the Potomac in 1782. The fi-rst successful 
steamboats of the world plowed our Western rivers, 
and within forty years, long before the first steamship 
crossed the Atlantic, were going far into our West, 
up the Missouri, the Arkansas and the Red rivers, 
making them more accessible and nearer in point of 
time to our Atlantic coast than was Europe. 

The first power loom was not invented until 1785 
and was not commercially successful until 1835. Until 
that time all our clothes were homespun and home 
woven. 

The first sewing machine was invented in 1830. 

Railways, which first supplemented and finally super- 



THE CREATORS OF WEALTH 29 

seded the canals and rivers, were not invented until 
1826. By making the remotest acres of our country 
accessible and their products easily marketable, our 
raiWays have done more to increase the wealth of 
our people than any other single instrument. 

The electric telegraph was not invented until 1835. 

The first power press was not invented tmtil 1814, 
and it was not until 1845 that Hoe first invented the 
fast press which has made possible the modern diffu- 
sion of knowledge and news by our daily press. 

I remember in my boyhood in the Orient, seeing 
the native blacksmiths laboriously making nails, ham- 
mering each one by hand, and I was astonished to 
find that being wrought, they could not be driven into 
hard wood, but that they always had to have a hole 
drilled in the wood before the nail could be used. 
The first nail-making machine was invented by Reed 
in our United States in 1786, but it was not until forty 
years later that his device really came into general use, 
and that cut-iron-nails superseded the old hand-made- 
wrought-iron-nail. 

Adam Smith, the first political economist of Eng- 
land, uses the manufacture of pins as an illustration 
of the benefits of specialized labor. Within fifty years 
after he wrote his ^'Wealth of Nations" the first pin- 
making machine was invented by Wright here in our 
United States (in 1824) and the specialized labor, so 
much admired by Adam Smith, went into the discard 
along with the political philosophies founded on his 
illustration. 

The first rolled iron beam for building construction 
was not made until 1855, and the first elevator, a slow- 



30 A DEFENCE OF WEALTH 

moving hydraulic one, was not invented until 1865. 

The first electric light did not glow until 1866, and 
then only in a laboratory. It was almost ten years 
later before it began to get into commercial use. 

The first steel ship was not built until 1870. This 
invention opened n^w possibilities in world commerce, 
by enormously increasing the unit of freight in foreign 
commerce, and reducing the cost of world transporta- 
tion. 

The telephone was not invented until 1876. While 
submarines, wireless telegraphy, automobiles, gasoline 
motors, aeroplanes. X-ray, and wireless telephony, are 
practically all the inventions or developments of the 
past twenty years. 

While the value of lands depends upon their accessi- 
bility, their accessibility depends upon the railroad, 
or steamship transportation facilities available for the 
transportation of their products. 

The rewards of labor are dependent upon the market 
for the products of labor, and from the beginning of 
time until the invention of railroads and steamships, 
it took labor a day's work to transport a ton of its 
product only one mile away. But with the brains of 
the Race devoted to relieving labor from this enormous 
handicap in transporting its products to where they 
can be consumed ; our brains have devised methods of 
transportation that enable us now to transport the 
products of labor a ton-mile for one-three-hundredths 
of a day's work, and this has left to labor 299/300ths 
of what it used to spend in carrying to market the 
products of its labor. The saving to labor by the in- 
vention of transportation facilities alone has enabled 



THE CREATORS OF WEALTH 31 

the ordinary laboring man to double his per capita 
production. 

It is plain to be seen from the record, which is 
there for anyone to read who will, that it has not been 
human labor in the physical sense that has relieved 
itself of the original limitations imposed upon it by 
nature, but it has been the thought and devices of 
extraordinary individuals, who have devoted them- 
selves to the task of saving their fellows from the bur- 
dens imposed upon them by nature. 

It has not been "labor" that has produced the wealth 
of the past 150 years but BRAINS. It is not labor 
in the physical sense that is producing the wealth to- 
day but BRAINS, and it never can be anything but 
human intellect devoting itself to accelerating produc- 
tion and directing the less endowed members of the 
race in their labor that will produce the still greater 
wealth of the future. 

The literature of the past has had much to say about 
the conflict between Capital and Labor, but it is only 
lately that the peoples of the world have begun to 
realize that this element of brains is more important 
in the creation of wealth than is either labor or capital. 

Political economists have not yet discovered the 
value of brains in production and wealth creation, 
but today we have the astonishing spectacle of capital, 
which knows it has no brains, and labor which realizes 
its inability to direct itself, eagerly competing for the 
use of brains, and offering the possessors of this scarce 
article almost anything they demand to accept the 
management of capital or the direction of labor. 

Capital would generally be idle and waste away if 



32 A DEFENCE OF WEALTH 

it were not for the brains of some thinker who finds a 
better way to use it than it is being used. And labor 
would often be idle if it were not for this same thinker 
who devises, invents and creates, undreamed-of oppor- 
tunities for labor. By holding before capital the 
greater profits and rewards in a new venture, the 
thinker secures the support of capital, which labor 
would not be able to secure for itself. 

Social economists claim that there is only one source 
of wealth— Labor. Political economists insist that in 
addition to Labor — Land and Capital — must be classi- 
fied as additional sources of wealth. But they both 
deny the economic value of that which is the greatest 
of all in the production of wealth — BRAINS. The 
ability to see the relation between cause and effect, the 
ability to see why labor expended in one way produces 
little, while labor expended in another way produces 
much. Why one crop is a failure on a piece of land 
while another crop produces prodigally. A farmer once 
was asked how much land a man needed in order to 
make a good living? And he replied, "If a fellow's 
got brains enough all he needs is enough land to stand 
on. 

If labor complains that it does not get w^hat it is 
worth, it should reflect upon the fact that there is 
nothing cheaper than capital. If safety can be assured 
to capital, the use of it can be purchased for two or 
three per cent. The great fortunes are made not by 
the possessors of capital but by men of brains, men 
who purchase the use of the capital for a small per 
cent, and use it with their brains to build up great in- 
dustries. Rockefeller was a great borrower. It is 



THE CREATORS OF WEALTH 33 

brains that make the difference between two and three 
per cent, and the profits that are made in modern busi- 
ness. The attack, therefore, upon the creation of 
wealth is primarily an attack upon brains, and it is 
just as well that we should recognize frankly the fact 
that the great mass of mediocrity is attempting to 
make it a crime for a man to have any sense. 

There are still those in this world who believe it a 
sin to have anything. They may be found stalking 
naked with their bodies smeared with ashes and their 
hair uncut in greasy wringlets everywhere throughout 
India, and some of their unwashed and unkempt dis- 
ciples may be found in all parts of the world. The 
idea was prevalent, even among people of our race, 
in the Middle Ages, and there were many who took 
the vows of poverty, but thanks to an enlightened con- 
science and a saner economic philosophy, our race at 
last has come to realize that man with his heart and 
his mind and his soul was not to spend his life like 
brute creatures in satisfying only the necessities for 
existence, but that it was his duty to do, to make, 
and to have, more than the individual needs for him- 
self. 

Do you think there would be any happiness in a 
world where you were barely able to find enough to 
keep alive and where you were constantly engaged in 
a struggle to satisfy the pangs of hunger? Only by 
producing more than he needs, does the individual 
create a surplus, and only by having more than his 
immediate necessities require can the individual secure 
the leisure that is necessary for contemplation and 
thought, for study, discovery and invention. 



34 A DEFENCE OF WEALTH 

Many have toiled in useless and purposeless tasks 
without creating wealth, and there is no greater eco- 
nomic crime than to spend useless toil on work that 
need never have been done. The greatest conservators 
in the world, and on the whole, the poorest compensat- 
ed and paid, are the Thinkers, those who study and 
scheme to devise ways and means of saving their fel- 
lowmen from useless work. 

The idea seems to prevail that when the leader or 
inventor or the resourceful manager of property by 
some device, or invention, or method, is able to increase 
the output of his product, or to reduce the amount of 
labor necessary to produce the same output, that he 
should divide this increased production among those 
whom he has directed in its production, but if the in- 
dividuals working under his direction do no more work 
than they did before, it is hard to see what part they 
have in the increased production, or why they should 
be given any share of the increase. Not unless there is 
something done by or delivered by the worker himself 
that contributes to or helps make the increase of pro- 
duction, or to decrease the amount of time necessary 
for the same production, can the worker or laborer 
maintain any claim to a share in the increased product. 
You might as well propose to pay the machine instead 
of the inventor of it. 

One of the first principles of economics is that con- 
sumption is limited but that production is unlimited. 
Let a demand for anything be created and the supply 
to satisfy that demand will increase at a steadily de- 
creasing cost. The demand of labor for higher wages 
has exactly the opposite effect from what labor de- 



THE CREATORS OF WEALTH 35 

sires. Labor seems to think that the high wage that 
it receives is conducive to prosperity, but the truth is, 
that as costs rise consumption falls, factories cannot 
sell their products, employment becomes limited and 
wages either fall in order to decrease the cost of pro- 
duction and stimulate consumption, or else the fac- 
tories close down entirely and wages cease altogether. 

I remember once dropping into the ofhce of Mr. 
Dodd, the famous solicitor of the Standard Oil Com- 
pany. I found him sitting at his desk, tipped back in 
his office chair, his feet up on his desk, while he gazed 
out of his window over the Bay. He seemed to be 
thinking, so I started to back out of the door, when he, 
glancing over his shoulder, motioned to me to come in. 
I walked slowly across the room from the door to his 
desk, then Mr. Dodd spoke, saying: "I was sitting 
once, just as you found me now, when Mr, Rockefeller 
opened the door as you did. Glancing in and finding 
me in this attitude, he stepped noiselessly across the 
room to the back of my desk, placing his elbows on 
the desk he leaned over toward me, and said in a 
hoarse whisper, *Dodd, is this what I pay you for?' 
Without changing my position, I looked up at Mr. 
Rockefeller and replied: 'Did you think you paid me 
for working?' Every time I attempt to leave for a 
vacation, the evening of the first day finds at least a 
score of telegrams from you, saying, *Dodd, what 
about this? Dodd, what about that? Dodd, come 
back quick.' If I do the thinking for the rest of you, 
I am doing all that can be expected of me." 

A New York paper some time ago pretended to 
show how the one-hundred-time millionaire was made. 



36 A DEFENCE OF WEALTH 

It started its description with declaring that there was 
a small nail mill with only $75,000 cash capital put in 
but it made money and made so many nails and sold 
so many nails and turned its capital over so many 
times in a year, that somebody came along in a few 
years and paid them one million, two hundred thou- 
sand dollars for the little wire nail factory that had had 
only $75,000 invested to begin with, and the Editor 
declared that this constituted watering the stock. Now 
there were a number of other nail mills, which the Edi- 
tor did not mention, that had more than a hundred 
thousand dollars invested in them and which never 
made a dollar, and which were abandoned and rusted 
away or were dismantled and were mostly or entirely 
lost. 

The two mills had exactly the same opportunity, 
they had bought the same kind of machinery, they 
used the same material and they had the same market, 
but there was no buyer for one, while a million two 
hundred thousand dollars was paid for the other. This 
was not because of any water, you could have pumped 
as much into one as into the other. It was because one 
mill had $75,000 plus brains and industry, and in the 
other instance it was one hundred thousand dollars 
minus brains and industry. 

A daily paper in attacking the United States Steel 
Corporation, deliberately misrepresented the facts so 
persistently that it is difficult to discuss its state- 
ments without heat. It said that Mr. Carnegie was 
willing to sell his entire steel business for $100,000,000. 
This happens to be true. But it then stated that, the 
option falling through that Mr. Morgan offered to pay 



THE CREATORS OF WEALTH 37 

Mr. Carnegie $300,000,000 in 5 per cent, bonds, and that 
because of this watering of the Carnegie holding in 
steel, the people of this country must continue to pay 
$15,000,000 a year to Carnegie and his heirs forever. 
Now this second statement deliberately implies that 
the people of this country were not paying Mr. Car- 
negie anything at the time he was willing to sell for 
$100,000,000, but the truth was that Mr. Carnegie was 
and had been for some time getting a profit of more 
than $15,000,000 a year out of his steel business, but 
because of competition and the danger of over-produc- 
tion, the business was more or less hazardous so Mr. 
Carnegie was entirely walling to sell his holdings in the 
steel business on a 15 per cent, basis. But those who 
knew Mr. Carnegie very naturally believed that if he 
had $100,000,000 in cash he would probably go back 
in the steel business, as it was the only business he 
knew, and it was that fear that made that proposition 
fail. It was then that Mr. Morgan conceived the idea 
of getting Mr. Carnegie to retire by giving him securi- 
ties, the income on which would assure him $15,000,- 
000 a year, the same as he had been getting out of the 
business before, with the distinct understanding that 
Mr. Carnegie would retire and would not re-engage in 
the steel business. The facts are that Mr. Carnegie 
had been getting $15,000,000 a year out of the busi- 
ness for years, but the $15,000,000 had not been capi- 
talized. Instead of the United States Steel Corpora- 
tion imposing one dollar of additional tribute upon the 
users of steel in the United States, It merely assured to 
Mr. Carnegie upon his retiring the same income that 
he had been getting for years. 



38 A DEFENCE OF WEALTH 

Up to the time of the organization of the Steel 
Corporation, a steel company was compelled to figure 
ten or fifteen per cent, on the cost for selling. Even 
the Carnegie Steel Companies found their selling ex- 
penses sHghtly in excess of eight per cent, of the cost 
of the goods themselves. But the economies in selling 
and distribution introduced by the consolidation of the 
companies that made up the United States Steel Cor- 
poration reduced the cost of selling the manufactured 
product from over eight per cent, of the cost to less 
than one per cent. 

It has been charged that Andrew Carnegie gave the 
world nothing in return for the $250,000,000 of bonds 
given him for his development of the steel business, 
but the truth is that when Carnegie began the develop- 
ment of the steel business, iron rails were selling in 
this country for $130 a ton, and most of them were 
imported from England at that price. When Carnegie 
retired from the steel business he had reduced the cost 
of rails from $130 per ton for iron rails, to $22 a ton 
for steel rails. During this period, approximately 
200,000 miles of railroad were built in the United 
States. The saving in the cost of construction of these 
railroads in steel alone, brought about by Mr. Car- 
negie's efficiency, was over $2,500,000,000. In other 
words, the fortune that Mr. Carnegie made out of the 
development of the steel business was only about ten 
per cent, of the saving that he made for the railroads 
built in America in that time. Had it not been for his 
energy and foresight the people of the United States, 
instead of paying interest to him on $250,000,000, 
would be compelled to pay interest on the additional 



THE CREATORS OE WEALTH 39 



$2,500,000,000 that their railroads would have cost. 

The essence of Socialism and of the Labor dogma is 
to deny the unequal gift of brains or ability to indi- 
viduals, and to demand the assassination of the indi- 
vidual with unusual gifts, if and when he appears, as 
a danger or a menace to the mediocre ability and 
brains of the common mass. This has been and is a 
feature of the Soviet government in Russia, which has 
frankly declared war on all so-called "intellectuals" 
and has hunted out and exterminated all the educated 
men and women that it could find. But it is easy to 
see where this will lead for the mass, which has always 
profited by and benefited by the inventions of the 
brains and ability of these extraordinarily gifted indi- 
viduals. 

Denying the rights of individuals to possess extra- 
ordinary gifts, Socialism refuses to inventors any 
rights in their devices that would give them any re- 
ward over others. If they should succeed in their 
propaganda, inventors, or those with the ability to 
invent, knowing that the mediocre mass would appro- 
priate their discoveries and that they would get noth- 
ing more out of them than would the veriest lout who 
never had a thought, would refuse to exercise their 
extraordinary gifts. They would stop trying to think 
and would cease to invent, and the world would be 
the loser. The essential weakness of Socialism is that 
in destroying the incentive for improvement and prog- 
ress, it destroys the possibility of improving the con- 
ditions of the ignorant and mediocre and that in its 
efforts to cheat extraordinary ability out of a fair 
compensation, it robs itself of all benefit that it would 



40 A DEFENCE OF WEALTH 

derive from the exercise of the gifts of its most intelli- 
gent individuals. 

Remember, it is always the individual who is the 
pioneer and who blazes the way for the multitude. All 
progress has been through these individuals, who have 
had the vision to look through the time-killing methods 
of their day and the courage to break with conven- 
tionality and precedent, and to use their ntwlj dis- 
covered ways and methods. Only by the preservation 
and encouragement of individual initiative is the germ 
of progress kept alive or induced to flourish. Kill 
individual initiative and all progress will cease and 
civilization die. 

To teach men that the ignorant are as good judges 
as the educated or that the ordinary and mediocre are 
as efficient and useful as the extraordinary, is cruel 
because it is so utterly false. 




Chapter V 

THE REWARD OF LABOR 

The Laborer is Worthy of His Hire — But No A4ore 

HE common statement made by those who 
attack wealth that the rich have accumu- 
lated their wealth by robbing the poor, is 
not and never has been true. The poor 
never produce as much as they consume. That is the 
reason they are poor and have nothing of which to be 
robbed. While wealth is the surplus product of pro- 
duction over and above consumption. 

Some men have imagination, vision, initiative, dar- 
ing, executive ability, call it what you will, but it is 
that which leads them to dare and to do, while the 
great mass of men refuse to do anything unless some- 
body else takes the responsibility for it. The greatest 
and oldest game in the world is "Passing the buck." 

Wherever you go you will find two classes of people, 
those who are serving and those who are being served. 
There is just one reason for the difference between 
the two classes. Those who are being served either 
have themselves been thrifty and saved something, or 
they have had someone before them who has been 
thrifty and saved something, while those who serve 
have never saved anything nor had anyone to do it for 
them. 

41 



42 A DEFENCE OF WEALTH 

If the five per cent, of our people who have accumu- 
lated and were the possessors of most of the wealth 
in this country had not saved their surplus and in this 
manner piled up the wealth that made it possible for 
us to spend and lend forty billion dollars in winning 
the war, our whole population would have been en- 
slaved, and most if not all of the laborers who are now 
condemning wealth would be engaged in involuntary 
and unpaid work for the German armies. It is a ser- 
ious question whether thrift can be nourished and 
further wealth accumulated for the protection of the 
race unless the thrifty and the industrious are relieved 
from the taxation, forced upon them by the demands of 
labor, which has destroyed the many little fortunes 
and competencies which our previous American policy 
has encouraged as an evidence of good citizenship. 

The injustice and uneconomic character of the 
attacks upon wealth have been proven by the fact that 
sincCjWe entered the war, the salvation of our country, 
depending upon making the best use of the wealth 
of the country and of the things created by and repre- 
senting that wealth, has required of the Govern- 
ment the suspension of practically every law that it 
had previously passed, imposing these unjust and un- 
economic burdens upon wealth. It is doubtful if the 
war could have been won if the administration had 
been compelled to observe the laws for the regulation 
of wealth that it had passed for the purpose of penal- 
izing and plundering the private owners of wealth. 

It is one of the curious things in connection with 
the attack on great business corporations and the 
efficient service which they render throug'h their com- 



THE REWARD OF LABOR 43 

mand of great ability and large capital, that they re- 
duce prices. Their incompetent and inefficient com- 
petitors always claim that this reduction of prices is 
due to some sort of secret rebate, or is a deliberate 
underselling to force them out of business, and ignore 
the prime economic feature of the whole business, 
which is that the reduced prices inure to the benefit 
of the mass of people who are the consumers of the 
product. 

It is strange indeed that these enemies of wealth and 
efficiency are able to command the hearing that they 
do when the thing that they ask is that people shall 
compel efficiency and capital to charge a higher price 
to consumers than is economically necessary in order 
to give their inefficient and uneconomic competitors a 
chance to exist at the expense of the people, who would 
be better served by the large corporation with its bet- 
ter product produced at a less cost. 

Practically every law that has been passed in re- 
sponse to popular clamor against wealth has been to 
declare criminal some practice that was economically 
sound and morally just, in an effort to handicap the 
efficient and economical business operations of able 
men and give the incompetent, the little and the mean, 
an opportunity to live of¥ of the necessities of the poor. 
What is needed is not a reformation of business 
methods, but a repeal of unjust and uneconomical laws 
that are hindering and preventing the able and the 
efficient from giving the masses of the people the 
benefit of economic production and cheap distribution. 

The legislation which has prevented this and kept 
alive the expensive, inefficient and uneconomic little 



44 A DEFENCE OF WEALTH 

business men, is the thing which above everything else 
has raised and keeps up the cost of living. 

Few people realize how the great developments 
which have made possible the luxury and comfort in 
which they are living are due not only to the existence 
of wealth but to the courage, foresight and real benefi- 
cence of wealth. 

Our people have so long been relieved from the 
primitive methods of harvesting and are so ignorant of 
the use of the hand-sickle, or of the flail, or of the 
threshing floor, that they do not realize how much of 
labor has been saved and how much of wealth has been 
created for the farmers by the invention of harvest- 
ing machinery. 

The money made by the harvesting companies is a 
small percentage of what their devices and machinery 
have saved not only the farmer but all the people who 
consume farm products ; yet our people have been 
taught that the International Harvester Company is 
the last word in plundering practice, thievery, and un- 
fair tactics. 

Andrew Carnegie, in his "Gospel of Wealth," called 
attention to the great changes in the standards of living 
brought about by modern manufacturing methods 
based on the use of great capital. In the primitive days 
before wealth in large quantities existed, articles were 
manufactured at the domestic hearth, or in small shops, 
which formed part of the household. The master and 
his apprentices worked side by side. The apprentices 
lived with the master, and when they rose to be masters 
in their turn, there was little or no change in their 
mode of life, and they in their turn educated in the 
same routine, their apprentices. 



THE REWARD OF LABOR 45 

The inevitable result of such a method of manufac- 
ture was crude articles at high prices like the hand- 
made nail. Today, with machines made possible by 
wealth; with manufacture in quantity made possible 
by large capital, the world obtains commodities of ex- 
cellent quality at prices which even the generation be- 
fore this would have deemed not only impossible but 
unbelievable. The result is that the poor today enjoy 
what the rich of those times could not even afford. 
The luxuries of those days are the commonest of our 
necessities today. The poorest laborer lives with 
more comforts than were possible for the richest of 
men a hundred years ago. The advance is due en- 
tirely to accumulated wealth and to its use as capital 
in production, and he would be indeed a foolish stu- 
dent of social conditions to claim that the masses of the 
race have not benefited thereby. 

The real truth is that competition as we know it 
never existed, and never could exist, under the condi- 
tions that prevailed before the introduction of modern 
transportation methods. Each community was more or 
less self-supporting and it was impossible for any dis- 
tant iron merchant to compete with the local black- 
smith, who manufactured such iron horseshoes as 
were necessary for his local customers, but with the 
development of modern transportation along with 
modern industrial efficiency, true competition has been 
developed. Whether the law of competition be good 
or evil, it is here. Evolution is competition ! We must 
recognize it and adapt ourselves to it. 

It is idle to pretend that competition can be pre- 
served in some things and eliminated in others. In an 



46 A DEFENCE OF WEALTH 

effort to preserve competition, our laws have been 
drafted to prevent combination or the adoption of de- 
vices by wealth or capital, that would eliminate com- 
petition, but when individual men or bodies of men 
organized into labor unions find themselves compelled 
by the operation of the same law to work at high ten- 
sion or to starve, they protest bitterly and cry out 
against competitive conditions, and endeavor to stop 
the operation of this natural law. The law of competi- 
tion may seem hard or cruel in its operation in individ- 
ual instances yet there can be no doubt that it is best 
for the race. Labor was not indulged in by the savage 
for it took little effort to satisfy his wants, and al- 
though we have traveled far from savagery, there are 
still but few individuals among few races who have 
learned to work voluntarily. The law of competition, 
therefore, has operated and will operate to insure the 
survival of those who have best developed the habits 
of work. 

No man in the world can possibly consume all that 
he can produce, and if he works steadily at production 
he is bound to create a surplus. The only thing that 
prevents any man from piling up a surplus and so 
accumulating more or less wealth is his indisposition 
to keep up effort and to continue work when his con- 
suming power is satisfied, or to take care of his surplus 
of production properly when it is created. 

Political economists pay little attention to one of the 
greatest necessities for the constant production of sur- 
plus and the accumulation of wealth. Much of what 
we call wealth exists in the buildings and improve- 
ments' that have been created out of surplus labor in 



THE REWARD OF LABOR 47 

the past, but these buildings rapidly deteriorate and 
depreciate or become obsolete and unfit for the loca- 
tion where they are, and must be destroyed and re- 
moved in order to replace them with better, more 
modern buildings suited for the needs of the commun- 
ity. This is only possible by the constant production 
of surplus wealth to cover or replace the wealth rep- 
resented by the old buildings which must be destroyed, 
and to provide the surplus necessary for the erection 
of new. This constant deterioration and wasting away 
of wealth is a thing which has been given little notice, 
and yet it is true that there are not over two or three 
conspicuous private fortunes in the world today over 
one hundred years old. 

There is no such thing as dishonest wealth. All 
wealth must have been honestly created originally. If 
it is in the hands of one who does not deserve it, it 
can only have reached there in a distinct way. One 
can steal that which another has produced but the 
world has always recognized thievery and punished it. 
The producer of wealth may have a gambler's in- 
stinct and risk it in a gambling venture, as so many 
do, but it is impossible to denounce the winner in a 
gambling proposition and excuse the loser. The pro- 
ducer of wealth may be, as he often is, a spendthrift 
in which case he squanders it, or he may be incompe- 
tent in the matter of management and care or conser- 
vation, in which case he wastes it. 

The existence of so many millionaires is in itself evi- 
dence of the extreme carelessness and improvidence 
of the mass of mankind. For if they were careful and 
thrifty and saved the surpluses that they make there 



48 A DEFENCE OF WEALTH 

would not be so much wealth scattered around for the 
tireless gleaners or the industrious scavengers to 
gather up. Remember the fortunes made out of the 
garbage business ! 

President Elliott of Harvard declaims with great 
force against "the abuse of great salaries in corpora- 
tions," and declares that the huge salaries of recent 
times enormously overpay their recipients, and he in- 
sists that the exaggerated salary is not really neces- 
sary either to get or to keep the best men. 

In a corporation of which I have knowledge, a Vice- 
President drawing a salary of thirty thousand dollars 
a year, devised a new method of handling his com- 
pany's business that saved them six hundred thousand 
dollars in a single year. By his single device he saved 
that company enough to pay the entire cost of his 
services for twenty years, and no one can tell what he 
will yet be worth to the company in the future. The 
truth is that this man is not being paid for his services 
at all but he is actually paying 95 per cent, of what he 
earns to the corporation for the privilege of serving it, 
and this is far less rather than more than what most 
men of brains pay to the mediocre mass of mankind 
for the privilege of serving the ignorant and unap- 
preciative people, who declaim against them. 

One of the great insurance companies, that has for 
years kept a record of dishonesty and breach of faith 
in business, has called attention repeatedly in recent 
years to the enormous growth of dishonesty among the 
masses of the people. It does not pretend to give a 
reason for this growth of dishonesty, but there can be 
no doubt that it is largely, if not entirely, due to the 



THE REWARD OF LABOR 49 

constant preaching of inequity, to a general repudiation 
on the part of the mass, of the property rights of the 
thrifty and saving in the product of their thrift and to 
the inculcation of the theory that what belongs to cor- 
porations or institutions belongs to anybody, and that 
the thief in stealing from them is merely taking back 
a part of what belongs to him. 

What can you expect of the ignorant masses of 
people, when the Chief Executive of the Nation makes 
such a statement as this : 

"They grew richer and richer until it became a 

national scandal," 

Are the masses of the people to be encouraged to 
thrift and persuaded to save a competence for their old 
age if it is a scandal to grow rich? 

Senator Tillman, after spending most of his life in 
attacking wealth, in his old age realized his mistake, 
and in one of his last speeches said : 

"Men with means have their place in the scheme of 
civilization, let them spend their money for works of 
art and bring them into this country free that they 
may be an inspiration to our own artists. If there 
were no inequalities of wealth we would have no pal- 
aces, no art, no progress, no civilization. Equality ts 
found only among savages.'* 

Even William J. Bryan has seen a light. At a re- 
cent meeting of laboring men he said : "The reward of 
labor is increased by the man of executive ability. I 
recognize that there is a talent that may be called 
'executive talent,' and that it is highly useful in the or- 
ganization of industry, and it is entitled to its just re- 
ward. What is left over for labor is larger than what 
would be left if industry were not organized." 



50 A DEFENCE OF WEALTH 

The talent for organization and management is so 
rare that its possessor invariably secures enormous re- 
wards no matter where he lives or under what laws 
or conditions he works. 

As Andrew Carnegie well said: *'The ability of a 
man, whose services can be obtained as a partner, is not 
only the first consideration, but is such a consideration 
that if he have the ability, his lack of capital is scarcely 
worth considering. For a man with ability soon cre- 
ates capital, but without the special talent required, 
the capital invested behind him soon takes wings." 

The Standard Oil Company was compelled, in re- 
sponse to popular clamor, to dissolve into its original 
twenty or more constituent parts and so forced by 
law to impose a score of overhead charges upon the 
public instead of one, with the result that what con- 
stituted a single share in the original trust and sold 
for only $600, rose in earning power so that the 
twenty scraps sold for over $2,000. If the Standard 
Oil Company had done this of its own motion it would 
have been charged with watering its stock. 

It would be amusing if it did not display such piti- 
able lack of economic understanding to analyze the 
many wild attacks upon capital and wealth and the use 
of corporations, on the score of alleged stock watering. 

There is not and never has been such a thing as 
watering stock. It is absolutely and utterly impos- 
sible. 

A Chinese Emperor finding that people were hoard- 
ing the precious metals, took iron and cast it into large 
disks, which he stamped with the denomination of 100 
cash, but the soldiers, whom he paid with this currency 



THE REWARD OF LABOR 51 

threw it away in derision, knowing that it was prac- 
tically worthless. The Imperial stamp declaring it to 
be worth 100 cash did not deceive anyone for a 
minute. A later Emperor hoping to escape the ex- 
perience of this one, took copper and casting it in the 
form of money stamped it as of the denomination of 
10 cash, but the people were undeceived by the attempt 
of their Emperor to **water" the coinage. Recognizing 
the value of the copper they weighed it, found it to be 
worth intrinsically two cash, and thereafter all ten 
cash pieces circulated as of the value of two cash each. 
So it was that although they bore the denomination of 
ten cash, still when a merchant asked you 10 cash for a 
cake he received from you not one of these copper 
pieces but five. English kings had the same experience 
with their coinage as did the Chinese emperors, and 
modern corporation organizers and financiers have had 
exactly the same experience with their corporate shares. 
When the Steel Corporation was organized the great 
banking house of Morgan issued shares that bore on 
their face a certificate that they were of a denomination 
of $100 each, but not one soul in the world was de- 
ceived thereby. The public recognized the speculative 
character thereof and expressed its hope that efficient 
management and economic operation might give them 
some value. It therefore purchased a few at about 
30 cents on the dollar, then deciding that its hopes 
were too remote of attainment, refused to accept the 
shares even at this valuation, and they repeatedly de- 
preciated in public estimation until they reached a 
quotation of $8 for a $100 share, or about one-twelfth 
of the fictitious denomination. 



52 A DEFENCE OF WEALTH 

At this price, which was all that the promoters could 
get for them, if they attempted to sell, there was little 
if any "water," and if the price of these shares has 
since approached, or exceeded, the denomination 
originally stamped upon them by the organizers and 
promoters of the Steel Corporation it is because twenty 
years of hard work, efficient management and re-in- 
vestment in the business of the surplus earnings, 
created not "water" but actual property of an intrinsic 
value greater than the price at which the shares are 
now quoted. This is because the public, while recog- 
nizing the existence of property equal to or in excess 
of the par value of the shares, doubts the ability of its 
management, though known to be honest and efficient, 
to continue earnings in the face of economic conditions 
that threaten the possible market for its products. 

And this is true of the shares of every company ever 
organized, promoted, and financed, where its shares 
have been sold to the public. The people have always 
ignored the denomination of the shares, or its nominal 
capitalization, and has expressed its opinion of the 
real values by the price it has been willing to pay for 
the shares. This being true, it is idle to pretend that 
the denomination printed on a share certificate, in 
anywise deceives anyone, or is any possible offense, 
social or ethical, against government or people. 

The payment in full in cash for a stock, which is 
asked for by these ignorant social economists, is no 
insurance either of values or of prosperity, for financial 
history is full of the cases of corporations, whose 
shares have been paid for in cash in full, that lost their 
money, spent it in useless development, and which sell 



THE REWARD OF LABOR 53 

today at a bare fraction of the actual cash par paid in 
therefor, while literally thousands of such companies 
have lost all their money and gone bankrupt. 

Yet, if there were any merit in the argument against 
so-called ''stock watering," the people ought in some 
way to have been protected when they invested in the 
shares of a company that had actually had $100 in 
cash paid in for every $100 cash certificate issued, 
but the whole world knows that this is not so, and 
furthermore, that it is impossible to make it so. How 
do you suppose the public determines the value of 
these new stock shares issued without dollar denomi- 
nation? It makes such valuation as it can of the 
actual property held by the company, adds a little to 
this or deducts some according to its judgment of the 
promoters and managers and divides the result by the 
number of shares. 

Socialists and political philosophers talk of un- 
earned increment as tho it were peculiar only to the 
increase in the value of land. They ignore the fact 
that the principle which adds to land that value which 
they call unearned increment operates in every branch 
of human endeavor. The growth of population which 
adds an unearned increment to land makes possible an 
increased circulation for a newspaper and so adds to 
the unearned increment of the publisher. It adds to the 
trade of the corner grocer and so adds to his unearned 
increment and makes the corner location so desirable 
that other grocers down the block bid high for the 
corner location. This same influx of population in- 
creases the demand for trucking, and so adds to the 
unearned increment of the owner of trucks, It adds 



54 A DEFENCE OF WEALTH 

to the demand for housing and so adds to the business 
and the unearned increment of the dealer in lumber 
and brick and other building materials. And lastly, 
by the increased demand for houses it increases the 
demand for labor, raises wages and adds to the un- 
earned increment of the laborer. The truth is that 
there is no such thing as "unearned increment." The 
term should be driven from economic discussion and 
it should be finally recognized that any change for the 
better in the condition of a community, adds to the 
value of whatever any inhabitant of the community 
has to sell, whether it be land or trade or labor. 

William Jennings Bryan, in an address to the stu- 
dents of the University of Pennsylvania, declared that: 
"No individual or corporation has a right to accumu- 
late more than a fair return for services rendered to 
society. There should be a code of laws," said Mr. 
Bryan, "for the regulation of wealth which would put 
an end to the power of the individual to accumulate 
vast sums of money. A man can rightfully collect from 
society no more than he honestly earns and the amount 
he can honestly earn is not more than what fairly 
measures the value of the services he does for society." 

Yes, but can anyone estimate the value of the serv- 
ices rendered to society, to the world and the billion 
and a half people in it, of Mr. Rockefeller, who by 
making safe and cheap the use of petroleum and by 
building up an economical system of distribution has 
spread the use of illuminants throughout the world, 
turned the night into day, banished ignorance and 
superstition, and done more to make possible reading 
and study, and the spread of education and culture, 



THE REWARD OF LABOR 55 

than all the men who lived in the world before his 
time? Who can measure the value of the services to 
mankind of Thomas Edison, with his many inventions? 
Or a Philip D. Armour, who by the development of 
refrigeration and cold storage, has brought within the 
reach of the poorest in the land, a quality of meat that 
was not only out of the reach of the richest but was 
absolutely unknown until he introduced his methods 
into the packing house business? Or who shall say 
what it was worth to the world to discover the method 
of refining sugar, that reduced it from its original 
cost of 25 cents or a shilling a pound, when that rep- 
resented a day's work, to its recent price of 5 cents 
a pound, which in our country at least is not over one- 
one-hundredth of the wages for a day? 

If it is right for labor to demand and get as much as 
it can for its work, is it not equally right for the man 
of brains to demand and get as much as he can for his 
thought, or his invention, or his device; and is it not 
equally right for the man who has accumulated a sur- 
plus, either by work or by his thought, to demand and 
get as large a share as possible in the joint product of 
his surplus and the work of those, who appeal to him 
for support out of his surplus, while they labor to pro- 
duce some thing of extraordinary value that could not 
and cannot be produced unless labor is supported dur- 
ing the long or difficult task of production? The same 
morality covers them all. And, if ignorant labor scat- 
ters and wastes its surplus production, is it immoral or 
criminal for intelligent thrift to glean and gather what 
would otherwise be lost? 




Chapter VI 

THE CRITICS OF WEALTH 

You Cant Eat It Up, or Drink It Up, Without Killing 

Yourself 

|CONOMIC history is full of the record of 
the experiments made by employers to in- 
crease the output and efficiency of labor, 
but these efforts unless based on the 
demand that labor shall work and deliver the goods 
or starve have invariably failed. In Mexico, American 
employers doubled and trebled the wages paid to Mex- 
ican labor by their Mexican and Spanish employers in 
the hope and expectation that they would get better 
work and more continuous work, but the result has 
only been to enable the Mexican laborer to earn as 
much in two or three days as he formerly earned in 
six, so that when he had worked but two or three days 
he invariably quit work for the rest of the week to 
spend his earnings. Exactly the same experience has 
been that of employers of negro labor in the South, and 
it is a notorious fact that during the recent war the 
raising of wages in an effort to get increased efficiency 
and output only resulted in lowering efficiency and 
output and compelling high-paid laborers to take two 
or three days off from their work every week in order 
to spend their money. 

The reports of the insurance companies indicate that 
less than 4 per cent, of all the persons dying have 

56 



THE CRITICS OF WEALTH 57 

accumulated sufficient surplus to leave anything large 
enough to be considered an estate or to demand ad- 
ministration or legal attention. It is also a significant 
fact that certain statistics show that about four or five 
per cent, of our population are ovirners or holders of 
shares of the corporations of this country. In other 
words, practically every person, who has accumulated 
any property at all is a partner in some one of the 
business or utility corporations of the United States, 
and an attack, therefore, on our corporations is an 
attack on every individual who has beenthirfty enough 
to accumulate any surplus above what he has been 
compelled to spend in living. 

When the great tunnel through Storm King Moun- 
tain and under the Hudson was being constructed in 
order to bring a pure water supply into New York 
City, an irresponsible newspaper man was sent up to 
write a story of the work. He was taken down in the 
tunnel and shown the men at work, and when he came 
out, irresponsible as he was, his story recorded a most 
extraordinary impression, which I shall give in his 
own language : 

"It was curious," he says, *to note the purely me- 
chanical stroke of the crowbar and shovel ; the work- 
men simply went faithfully through the motions that 
they were hired to make, not one of them worked as if 
he had an interest in the job yet not one was lazy or 
shirking. The engineers, however, showed the intensest 
interest, a nervous, high-strung devotion, as if brain 
and heart were all in the enterprise. On them was the 
responsibility of the shovels, the blasts, the results, 
but the living machines, the workmen, just put forth 



58 A DEFENCE OF WEALTH 

the muscular movements that the engineers had calcu- 
lated to be necessary. 

"The exposure and danger were alike to both the 
engineers and the laborers, but the laborers could give 
their undivided mental energy to keep up their pluck, 
to safeguard themselves from nervous depression, to 
keep muscles mechanically moving, not an ounce of 
energy did they need to expend in thinking! The 
w^orkingman swung the tools, swung and swung, until 
his shift was relieved and he was done, but the eager 
and expensive thinking was burning up the vital forces 
of the engineers. The push, the relentless will, that 
attacks each fresh menace of defeat; the hours by 
night and day when dauntless faith in his figures alone 
sustains the engineer as he defies nature, these things 
earn large compensation. Nothing of this was sug- 
gested by any remark of the engineers themselves, 
who seemed happy as conquerors, but I should want 
others to see it in this lip"ht." 

Only accumulated w^ealth to an enormous amount 
has made possible this extraordinary undertaking that 
is to furnish pure mountain water to the millions who 
live in New York City. 

Only accumulated wealth has made possible the net- 
v/ork of railroads in our country that has made it so 
easy and so cheap to transport food and other sup- 
plies from any part of the country to another, and so 
has made impossible in this country the famines that 
have swept off the populations in others. 

Only accumulated wealth has made possible in this 
country the scientific light which has made possible 
home reading and study of evenings and so made our 



THE CRITICS OF WEALTH 59 

people the best educated and best informed people in 
the world. 

One of the great Socialist papers complaining of the 
financial methods of the late J. P. Morgan, wrote an 
editorial, asking: "Why don't the people hire J. P. 
Morgan and be done with it?" The strange thing 
about the Socialist writers and thinkers is that they 
fail to realize that that was exactly what the people had 
been doing from the time Mr. Morgan entered business. 
He had been in the employ of the people, gathering to- 
gether the little surpluses from here and there until in 
his hands it became a surplus of a size sufficiently large 
to construct great service institutions for the benefit 
of the people. The so-called fortune that Mr. Morgan 
left at his death was really only a small commission 
paid by the people to Mr. Morgan for his lifelong 
services in their behalf. 

Several years ago, in describing himself and others 
who have accumulated vast fortunes, Mr. Rockefeller 
said : *T am harnessed to a cart in which the people 
ride ; whether I like it or not, I must work for the race. 
The first step I took in business obligated me to 
the men who worked for me and who thenceforward 
looked to me for employment, and investors who put 
in their money and looked to me for results. The 
workingmen, numbering but a few score at first, then 
hundreds, then thousands, and now, approximately, a 
million and a half. There was a similar increase in 
the number of investors, who were holding me to 
account, while I worked for mvself, T had to work for 
them. We are servants — not masters, we, who are 
or have been engaged in large business affairs. It is 



60 A DEFENCE OF WEALTH 

our most vital interest that the country shall prosper, 
and that all the people shall prosper, for only then can 
we find among them a market for what we produce. 
The people can destroy us, or our business, but in so 
doing they destroy our power of serving them. In 
fact, we would probably suffer the least. The richest 
man in the world can only eat three meals a day, and 
it does not take much to dress as well as is possible 
or to provide real luxury in living. The men who have 
acquired the largest fortunes have not pursued wealth. 
Had they desired money for the enjoyment of money, 
they would have stopped far short of spending their 
whole lives as they have in the struggle, that is busi- 
ness, but these men continue to toil at their desks, be- 
cause they love achievement. They work for the keen 
delight of creating something where nothing was, and 
some time the people will be convinced that these men 
were toiling for love of their country as well." While 
ignorance strives to destroy what it does not under- 
stand intelligence labors to reproduce in physical aspect 
that which it has seen in the mind's eye long before. 

The investment of wealth in the construction of 
large plants that have superseded small ones has re- 
sulted in the decrease in the price of kerosene from 30 
cents a gallon to 10 cents a gallon; of sugar from 20 
cents a pound to 4 or 5 cents per pound ; of gas from 
$2.50 per 1000 feet to $1.00 per thousand, and elec- 
tricity from 25 cents a Kilowatt to 2 cents a Kilowatt, 
if used in large quantities. The charges of 8 and 10 
cents a Kilowatt now made for ordinary lighting serv- 
ice are due entirely to the cost of installation and the 
delivery of current in such small quantities as are used 



THE CRITICS OF WEALTH 61 

by the ordinary users of electric light. It is like ask- 
ing your milkman to deliver cream by the thimbleful. 

Careful investigation has discovered the fact that 
the prices of non-trust articles have advanced much 
more than the prices of the articles manufactured by 
trusts, and this is as we would have a right to expect, 
for articles manufactured by the largest corporations, 
or trusts, have every facility that great capital can sup- 
ply and command a higher efficiency and better skill 
than articles manufactured by smaller or non-trust 
producers. 

Two different investigations conducted by the Gov- 
ernment have disclosed the fact that the meat packers 
do their business on less than a two-per-cent, margin, 
while the small dealer of meats, of poultry, or of green 
vegetables, makes from 100 to 300 per cent, on every 
sale. I know one keeper of a stand in front of a meat 
shop whose capital is only $100 but his turnover is 
$15,000 every year and out of it he makes $5,000 net 
profit. The retail prices of everything are abnormally 
high because there are too many retailers in the first 
place with too great an expense for rents and dupli- 
cated delivery service. Instead of attacking the Pack- 
ing Houses for converting cattle and hogs on the hoof 
into meat on a two-per-cent. margin of profit, the 
whole meat-consuming public should ask the great 
Packing Companies to extend their efficiency into the 
retailing of meat and put out of business the hundreds 
of thousands of small meat shops that are compelled to 
charge the people abnormal prices for meat in order to 
run their small, uneconomically conducted businesses. 
It is possible that the Packing Companies would make 



A DEFENCE OF WEALTH 



additional large profits by doing so, but they would 
save the masses of the people who buy meats, hundreds 
of millions of dollars by so doing. Think what it would 
mean to every meat eater if meat was distributed as 
economically as the Standard Oil Company distributes 
oil. 

The experience of every attack on a so-called "trust- 
produced article" has been, that the break-up of trust 
methods and trust distribution has destroyed the effi- 
ciency in that line of business and made prices of such 
commodities higher to the consumers throughout the 
world. What is the use of declaiming against profi- 
teering while you keep on clamoring for laws that 
protect the profiteers and legalize their methods and 
impositions? 

The middlemen, who have made their livings hereto- 
fore, by standing between the producer and consumer, 
very naturally object to being eliminated and driven 
out of their easy livings. It is to their clamor that most 
of the economic legislation that harasses business 
should be attributed, but as certainly as the law of 
gravitation forces water to run down hill, so those 
methods that mean cheaper production and more effi- 
cient and economical distribution will tend to establish 
themselves in spite of legislative prohibitions. 

People must be brought to realize that the great or- 
ganizations that serve them so well are only possible 
through the existence of great v\^ealth in the first place, 
and through the investment of that wealth in the pro- 
duction of articles for public use and construction for 
public benefit and service. The impossibility of the 
thriftless providing for themselves is nowhere better 



THE CRITICS OF WEALTH 63 

illustrated than in this matter of service. The rail- 
roads of this country were only possible through the 
use of the wealth of this country in their construction, 
and as long as wealth was protected in this form, the 
construction of additional railroads for the service of 
the country and the people in it continued. But when 
attacks began to be made upon wealth in the form of 
railroads, it became impossible to get new wealth to 
invest in this way. As the people have been getting 
no additional railway service on this account, either in 
new mileage or in additional trains and car service, 
traffic became congested, rolling stock deteriorated, 
and as a result, the labor of the country is suffering to- 
day from poorer train service, greatly increased costs, 
stagnation, and destruction of its own prosperity, be- 
cause of its own foolish attack on the surplus savings, 
or wealth, of those who formerly furnished them with 
abundant train service at a cost more than 50 per cent, 
less than they are paying now. 

People in attacking the corporations seem to im- 
agine that a corporation is some great monster that is 
self-creating and that devours them. The truth is that 
a corporation is one of the most beneficent devices of 
thinking men to enable people to contribute as much, 
or as little, as they please toward a fund to be used 
in some business or in some project without hazarding 
the rest of their savings or property. A corporation 
is nothing but a limited partnership, toward whose 
common fund the separate partners have contributed 
in proportion to their holdings of shares. Any given 
corporation is therefore simply a partnership made 
up of the farmer, the machinist, the merchant, the 



64 A DEFENCE OF WEALTH 

clergyman, the school-teacher, the doctor, the lawyer, 
and rarely the banker, who have contributed their 
shares to the common fund. I say, rarely the banker, 
because usually the banker instead of contributing 
to the original fund loans money to the partner- 
ship, so that the fund contributed by the others is 
security for his loan. 

But if you want to understand the conflicts and the 
problems of the present day, it is only necessary to 
strip away the camouflage of civilization. Reduce the 
problem to its primitive terms, strip it of its disguises, 
and you will recognize it at once. You will find your- 
self confronted by the world-old problem : 

SHALL THOSE WHO CHOOSE NOT TO 
WORK BE PERMITTED TO LIVE BY PLUN- 
DERING THOSE WHO DO WORK AND WHO 
SAVE, OR ATTEMPT TO SAVE, THEIR SUR- 
PLUS PRODUCT IN ORDER TO GAIN TIME 
TO THINK? 




Chapter VII 

PROGRAMME OF LABOR 

It Proposes Nothing Less Than a Reversion to 
Savagery 

WONDER if the people of America realize 
that it is only through our great corporate 
combinations, our great trusts, if you 
please, that the cost of living has been 
so reduced in proportion to the wages of labor : 
the hours of labor have been shortened, production has 
been greatly increased and v^^orkmen have been 
enabled to take the time to read. While reading many 
of them are misinforming themselves, with the result 
that they are denouncing the very institutions that 
have made possible their leisure. 

The people, who attack wealth, do not realize what 
they are doing, and it is common even among those 
who should know better to express fear over the 
growth of wealth. Now you must realize that wealth 
is nothing more or less, and never can be anything 
more or less than the surplus of production over con- 
sumption. The increase of wealth means nothing but 
that as a people, we are increasing the surplus of what 
we produce above what we consume, and so piling up 
that surplus to be used in all the possible ways in 
which such a surplus can be used. 

We have not yet begun to use that surplus as we 

65 



66 A DEFENCE OF WEALTH 

should, because we have had so many uses for it here 
in our own country in developing the still undeveloped 
portions of our own national territory. But when we 
realize that our own country is the best developed 
country in the world, that practically half of all the 
railroad mileage on the earth has been built in our 
own country, that more than two-thirds of all the tele- 
graph and telephone lines in the world have been 
built and are in our own country, that eighty per cent, 
of all the automobiles built and in use in the world are 
in our own countr}^, and that the rest of the world is 
waiting for similar development, we must see that far 
from discouraging the creation and accumulation of 
surplus, or wealth, that we must increase it, and turn 
our surplus, our capital, to the developing of China as 
our own country has been developed ; to the develop- 
ment of Australia ; to the development of Africa and 
South America. 

To attack wealth is to attack thrift. To appropri- 
ate the surpluses thus created means to discourage 
work, and there is no possible stopping between the 
two attitudes toward civilization. If you preach thrift 
you must protect created surpluses. If you attack 
created surpluses you kill thrift and turn labor back 
to the point where there is no object in producing 
anything more than the individual can consume. 

The movement for shorter hours is primarily a 
movement directed against surplus production. It is 
intended to reduce any possible production to the 
point where a surplus will be impossible. It is, there- 
fore, directed primarily against the possible creation 
of any wealth, and is an effort on the part of unthink- 



PROGRAMME OF LABOR 67 

ing labor to reduce the whole world to a condition of 
living from hand to mouth. 

The programme proposed by the so-called labor 
leaders needs but to be studied to demonstrate that it 
proposes nothing less than a reversion to savagery. 

Let us state their programme in its own terms, and 
let us see where it leads us. 

Labor has asked, first, for shorter hours because 
it claimed that it was producing more than could be 
consumed, and was therefore piling up a surplus 
which being in the control of others gave those, who 
controlled it an undue advantage over those who 
produced it. 

Second, labor asked for higher wages or a larger 
share of what it produced, claiming that since it was 
the producer of all this product, that which was con- 
sumed as well as the surplus that remained above 
ordinary consumption, it was entitled to a larger share 
of the product so that there would be a smaller sur- 
plus left in the hands of those who controlled that 
surplus. 

Third, having secured shorter hours so that the 
total product of their labor would be less and having 
secured a larger proportion of what they produced 
as its share, labor next insisted on cutting down the 
product per man to what the poorest workman in the 
lot could produce. 

But while insisting on curtailing the product, labor 
was unwilling to accept any less amount of the pro- 
duct for itself, so that the sole result of curtailing the 
product was not to reduce the amount of the product 
that labor received but was to reduce the surplus left 



68 A DEFENCE OF WEALTH 

over for those who had gathered C^e material for labor 
to work on and who protected the surplus for distri- 
bution during times of temporary shortage. 

This process has been continued until surpluses 
have been consumed in some lines, as in coal, in 
which line labor has succeeded in decreasing its hours 
and increasing its proportion of the product until the 
surplus has been entirely consumed. And labor now 
attempts to take advantage of the necessities of the 
other branches of industry by refusing even to pro- 
duce coal unless the others will permit labor engaged 
in coal mining to make two or three times as much as 
labor in other lines of industry. 

It is easy to see where this is going to lead. The 
producer of wheat will refuse to give the producer of 
coal, wheat that it takes him two days to produce for 
coal that it takes the miner but one day to produce. 
The spinner of wool is not going to give the product 
of two days of his labor to the coal miner for the 
product of one day of his labor. Before they will do 
that, they will quit producing wheat and weaving 
cloth, and go to producing coal themselves. Now when 
the coal miner finds them doing the work that he re- 
fused to do, he will be compelled to attempt to prevent 
them — that would mean a fight. 

When the miner found the clothing man refusing 
to furnish him clothes, he would attempt to raid the 
clothing store and help himself, and when he found 
the groceryman refusing to sell him food, he would 
raid the grocery store or the bakery shop, with the 
result that the bakers and the grocery men and the 
clothing men would organize themselves together to 



PROGRAMME OF LABOR 69 

protect themselves against the raids of the miners, 
and they would either wipe the miners off the earth 
or reduce them to a condition of subserviency, where 
for a time at least (that is until they could recognize 
the fact that they were no better than other men) they 
would be compelled by force to remain in a position 
of slavery to the others. (See how quickly the prob- 
lem and the conflict reduces itself to the identical level 
of the primitive men.) 

The movement for the curtailment of production 
is for the purpose of letting consumption continue 
until it has wiped out all surpluses. Each trade hoping 
in this way to force all others to become dependent 
upon it. 

The wiping out of all surpluses means that the whole 
race must go back to the stage where it lives a pre- 
carious existence, where the race has no time to give 
thought to anything else but finding each day that with 
which it may feed itself. If, for any day, it should 
fail, failure would mean hunger, and hunger would 
mean raids and raids would mean reprisals. 

Being compelled to devote all of his time to the 
search for food and shelter, no human being would 
have time for thought or for study, or for invention. 
With no time for study, there would be no time for 
education. With no time for thought above the physi- 
cal fact of living and keeping alive, there will be neither 
religions nor morals. There were neither religions 
nor morals before wealth creation began and there 
can be none when wealth has vanished, for when self- 
preservation becomes the sole object of existence, the 



70 A DEFENCE OF WEALTH 

race is reduced to the stage of animal existence and 
becomes like animals, unmoral. 

Lenine, in addressing his followers, candidly con- 
fessed that: "If socialism is to prevail it must show 
a production and efficiency superior to capitalism, but 
that efficiency is possible only when a 'boss' is instantly 
obeyed. However free a citizen may be outside of 
the factory, once within the factory and under the 
direction of a 'boss,' whom he himself has helped to 
select he must serve that 'boss' with military quickness 
and exactness. If we cannot get production otherwise 
it may be necessary to give the 'boss' the right to inflict 
the death penalty on the worker who refused to obey 
orders as a court-martial does on a mutinous soldier." 

This is the logical end towards which labor's pro- 
gramme leads. 

Eighty years ago, in the United States Senate, 
Daniel Webster said: "There are persons who con- 
stantty clamor, they complain of speculation and of 
the pernicious influence of accumulated wealth. They 
cry out loudly against all banks and corporations, and 
all means by which small capitals become united in 
order to produce important and fundamental results. 
They carry out mad hostility against all established 
institutions. In a country of unbounded liberty they 
clamor against oppression. In a country of perfect 
equality they move heaven and earth against privilege 
and monopoly. In a country where property is more 
evenly divided than anywhere else, they rend the air 
shouting agrarian doctrines. In a country where the 
wages of labor are high beyond parallel, they would 
teach the laborer that he is only an oppressed slave. 



PROGRAMME OF LABOR 71 

They would shock the foundations of industry and 
dry up all the streams." 

In this country of ours we have developed the 
greatest power of production in the world. A power 
of production so great that not only can we not begin 
to consume what we produce, but it has been estimated 
that we can produce in this country eight times as 
much as we can consume. Manifestly, the prosperity 
of this country will not be maintained by curtailing 
our production, but rather in seeking to sell abroad 
our surplus. If we do not sell abroad or invest 
abroad a large part of our surplus production or 
wealth we must reduce our production at home. 
Reduced production means less work, less work means 
less wages, less business of all kinds and gradual stag- 
nation and hardship. Look at the damage that has 
been done to the people of Russia by their senseless de- 
struction of their own power of production. Yet this 
is the direct result of that kind of "Public Ownership" 
which is urged by labor as a cure for our ills here. 

The kind of public ownership that we want is not 
the irresponsible, wasteful and destructive ownership 
advocated by labor and socialistic propagandists. If 
the public want real pubHc ownership they have only 
to interest themselves in the businesses engaged in 
serving them. The only proper kind of public owner- 
ship is ownership by the citizens of all classes of the 
stocks of our railroads, our public utility corporations 
and all those other great companies, engaged in feed- 
ing or satisfying the imperative needs of the people. 

If the discontented laboring man would work a 
couple of extra hours a day for a year and invest the 



72 A DEFENCE OF WEALTH 

surplus so created in stock of some one of the busi- 
nesses engaged in public service, and would thereafter 
devote a little intelligent study to the conditions under 
which, that or other businesses must be conducted, we 
would have real public ownership of the kind that 
would practically put an end to the discussion of the 
senseless kind promoted by the professional critics 
of wealth. 

When one appreciates the sanity of this proposition, 
it seems reasonable to propose that no citizen should 
be permitted to vote on a question involving a public 
service proposition unless he could show that he had 
created some surplus by his work and invested that 
surplus in the public service corporation under discus- 
sion. In other words, if he is not a stockholder in the 
proposition he should not have a vote. The irrespon- 
sible will always be numerically in the majority, but 
granting the interest of the mass of people in the 
direction of government, and granting that their in- 
terest in successful government is greater than all 
other interests, it by no means follows that the mass 
of their interest is entitled to direct the state, or that 
civilization will be better protected by permitting to 
their mass of mediocre minds the direction of the 
society. 

A pilot who knows the rocks is a far safer navigator 
for the ship of state than any crew, however numerous 
who know nothing of navigation and who have no 
acquaintance with the shore. 



kSSd^Imc 



Chapter VIII 

WEALTH OR NO WEALTH? 

What Did Poverty Ever Produce? 

RIMITIVE man produced nothing. It was 
for a long time possible for him to find 
in nature by a little search all that he 
could consume. But as population in- 
creased in the favored spots, effort became necessary 
in order to assist nature to produce enough to supply 
the wants of the increasing population. 

The beginning of wealth was when the foresight 
of one man caused him to save what had formerly 
been thrown away. From that day till this, the crea- 
tion and conservation of wealth has always been a 
triumph of judgment and of will over instinct and 
desire. To continue at work after hunger is satisfied 
is an intellectual feat. A combination of that judg- 
ment, which assures us that the continuing of work 
under present favorable conditions will create and 
pile up a surplus, that will enable us to take rest at a 
time in the future when rest will be more needed, and 
the exercise of will power to keep at work, which our 
judgment tells us is expedient. You know that no 
man can consume all that he can produce. 

The truth is that every man is born to be rich, and 
that those of us who are not, are not, because of some 
weakness of our own which we are unable or unwill- 
ing to curb or to overcome. 

73 



74 A DEFENCE OF WEALTH 

Did you ever as a boy, get up early and do your 
chores before breakfast, so that you could have the 
rest of the day to see the circus or to go to the fair? 

Your efforts to do your alloted task in a shorter 
time than usual in order that you might have hours 
or days that you could not otherwise have for pas- 
time or study, are based on exactly the same principle 
as that involved in all surplus production or wealth 
accumulation. It is the effort of individuals to work 
a little harder or a little longer and to produce more 
than they need for the consumption of a day, a month 
or a year, in order that they may enjoy a later period 
for recreation or study, or work of a kind that they 
prefer, without being under the necessity of working 
every day for that day's support. 

Remember wealth is not mere production! A vast 
production that is totally consumed creates no wealth. 
You may produce ten times as much as another man 
produces, but if you consume all that you produce 
while he saves even a small surplus of what he pro- 
duces, he is richer than you. Wealth is only what is 
left over after consumption. It is the surplus stored 
up, like the fat on the bear that enables it to live 
through the winter without other nourishment. 

It is time for our political philosophers to recognize 
and to teach that it is impossible for wealth to be 
created dishonestly. The existence of capital is proof 
of the fact that some time, some where, some how, 
some one worked more than he needed to work, 
created more than he could consume and with foresight 
saved it. There never was and never can be any 
wealth or any capital created except by work which is 



WEALTH OR NO WEALTH? 75 

productive and creative. The possession of wealth, or 
capital, in the hands of any other than those who 
created it is proof of the incapacity of the original 
creators to properly protect it, or care for it, or use 
it, and is proof that it has in compliance with that 
higher and fundamental law of use, passed into the 
hands of those, who can or at least have the courage 
to make more or better use of it. 

Labor, itself, has always obeyed this law of use. 
In primitive times the roving and unattached individ- 
uals sought out and attached themselves to those 
chiefs, leaders, or "bosses," that were able to make 
use of them and so m.ake better provision for them 
than they could make for themselves. Leadership, 
therefore, fell to the man who was the best fighter, 
the best hunter, the best herdsman, the best agricul- 
turalist, and in these days, to the man who is the best 
industrialist. The incompetents, even while protest- 
ing against their leaders, have always sought to work 
for and put themselves under the direction of the 
abler and more resourceful individuals of the race. 

In primitive times, the accumulation of surpluses, or 
of wealth, was more or less accidental and haphazard. 
It was always local. For it was impossible with the 
then means of transportation and communication, to 
use the surplus, or wealth, that existed in any one 
part of the world for the relief or development of any 
other part of the world. Yet every evidence that we 
now have of the civilization that existed in the past 
is due to the use of the wealth that then existed, in 
expressing its thoughts, its ideals and its aspirations, 
in the monuments, the images, the rock cut caves, the 



7e A DEFENCE OF WEALTH 

temples, the walls, the canals, the pyramids, and other 
monuments of the past. 

Before you commit yourself to a civilization based 
upon the absence of wealth, you should take stock of 
the things that you most need, that you most use, that 
you most enjoy, and then consider that everything 
that we regard as indispensable in our lives ; everything 
that is expressive of what we call civilization today, 
would not have been devised and never could have 
been made or done had it not been for the existence 
of great surpluses of great wealth. 

And further that they cannot exist or continue to 
be made for your use and enjoyment except by the 
creation of still greater surpluses, or wealth. 

What would the genius of a James Watt have been 
worth without capital? But by the use of the then 
existing wealth, he turned coal and water into steam 
and revolutionized the use of power, relieving for all 
time the race of man from the burden of winding 
windlasses or working pumps, and practically elimi- 
nated men and animals from the work of transporta- 
tion. 

It is doubtful whether our American Colonies could 
have won their independence had it not been for the 
wealth accumulated by George Washington and 
Robert Morris. 

We would today be without railroad's, steamships, 
telegraphs, telephones, electric lights, pure water, 
steamheat, phonographs, moving pictures, vacuum 
cleaners and all those other things that make life to- 
day endurable, had it not been for wealth, created and 
saved by the judgment and self-denying will of those 



WEALTH OR NO WEALTH? 77 

who placed it in the hands of scientific men, who used 
these accumulations in the creation and development 
of these wonderful public servants. A development 
that they have continued until all these things have 
been made so cheap that their use is practically uni- 
versal among the peoples pretending to civilization. 
We, in this country, cannot even imagine what the 
world was like before they came into use. 

Such relief as was given to stricken people in the 
case of the Galveston flood, or of the San Francisco 
fire, or of the Italian earthquake, was impossible in an- 
cient times and would remain utterly impossible even 
in this day without the existence of accumulated sur- 
pluses or wealth, dispensable by scientific methods 
under modern conditions. 

Without accumulated wealth, such great works as 
the construction of New York City's subways, would 
have been impossible, and all our people who now 
use them would either be cut off entirely from their 
present employment, or be compelled to take hours 
to reach their work. 

When I think of all these things, I wonder that a 
Socialist, or a Bolshevik, will ride on a railroad, or 
use any of the multitude of modern devices invented 
by the intellectuals, whom they denounce, and built 
or constructed by the wealth, which it is their declared 
purpose to destroy! Conscientious practice of the 
principles that he professes would require the Social- 
ist, the Bolshevik, and the I. W. W. to go down to the 
river to get his drinks, and to walk wherever he goes, 
unless he is able to get some fellow to carry him. 

Without accumulated wealth the recent triumphs 



78 A DEFENCE OF WEALTH 

of mankind over nature would have been impossible. 
The Suez Canal and the Panama Canal would still re- 
main dreams. 

Without accumulated wealth the hospitals of the 
world would rem.ain unbuilt, and such extraordinary 
benefactions as the Rockefeller Medical Research, the 
Rockefeller Medical Work in China, and the Educa- 
tional Foundation, would not only be impossible but 
would be unthought of. But for the wealth of Amer- 
ica and Great Britain the world would now be under 
the domination of the exponents of force and plunder. 

Destroy wealth and you kill education. For only 
by the creation of surpluses, is it possible for any in- 
dividual to take time off from daily v/ork to study. 
Abolish wealth and you abolish libraries. You abolish 
even the use or need of libraries. For when everyone 
is living* from hand to mouth, as the labor programme 
seeks to compel, the pursuit of food will leave no one 
tim.e for reading or contemplation. Destroy wealth 
and you make impossible everything in the way of art. 
The success of the propaganda against wealth would 
further necessitate the destruction of all art now ex- 
isting, for fear that some seeing the remains of the 
art produced in an age of wealth might argue that it 
would be well for the race to return to the conditions 
of a civilization that made the production of such art 
possible. Destroy wealth and you put an end to scien- 
tific investigation. Who can study while hunger calls? 
Everything you have or need or use or enjoy is the 
product of wealth. Wealth ! created not by ignorance 
and labor but by brains. 





^USasjSm 


m 


m 



Chapter IX 

WHAT DID IGNORANCE AND POVERTY 
EVER PRODUCE? 

HE man, who never produces any surplus 
but who works each day only enough to 
provide that day's consumption, is the man 
who is truly poor. Poor, because, he 
never accumulates the surplus that enables him 
to take a day off for recreation or study. Poor, 
because, the daily grind of satisfying the demands of 
his stomach leaves him unable to do anything for the 
cultivation of his mind. When you realize that this 
is the essential quality of poverty, of poverty the result 
of ignorance and the creator of ignorance, and as 
such the creator or cause of all those vices and diseases 
that thrive because of ignorance; when you realize 
this then you see the moral hemousness and economic 
folly of a social philosophy that pretending to wish 
the betterment of mankind, in fact preaches and prac- 
tices a curtailment of production that forever fastens 
poverty and ignorance on those who practice its 
principles. 

Socialistic labor complains of the high cost of living, 
and blames this on the existence of wealth. It 
professes to believe that only by the destruction of 

79 



80 A DEFENCE OF WEALTH 

wealth can living be made cheaper. The truth is that 
rising prices which produce the high cost of living are 
the result of a consumption greater than production. 
The only way to reduce the price is to increase the 
production, yet labor insists on shorter hours, the cur- 
tailment of production, and fights every effort to in- 
crease production, which alone can reduce the cost 
of living. And further than this, labor strives to de- 
stroy all surplus production, or wealth, which alone 
can keep prices down and the cost of living low. 

Remember that wealth is nothing but surplus pro- 
duction created and piled up in excess of consump- 
tion. Wealth is over-production, and over-production 
always tends to reduce prices and lower the cost of 
living. Over-production, or the production of a sur- 
plus in excess of consumption is the creation of wealth. 
It is, therefore, only by wealth production that we can 
reduce prices and lower the cost of living. 

On the other hand, wealth destruction, the con- 
sumption of surpluses and the curtailment of produc- 
tion, means rising prices and the raising of the cost 
of living to a famine level. 

It is time for everyone to appreciate that the more 
of surplus, or wealth, that there is created, the more 
there is for distribution, and the more there is for 
each and every man. 

It is perfectly plain that we can better our condition 
only by accelerating the production of wealth, and that 
can only be done by removing all obstacles to wealth 
creation, by the universal use of every labor-saving 
device that the intellectual Caesars of our race have 
been able to invent, and of offering even greater in- 



WHAT DID IGNORANCE, POVERTY EVER PRODUCEf 81 

ducements to the Caesars of genius living, or that may 
come hereafter, to devise even more wonderful instru- 
ments for wealth creation than any that have been 
conceived or devised in the past. 

The issue is plain. A race afflicted with hunger and 
cold gives no thought to the immortality of the soul. 
It was only after the abolition of hunger and cold that 
the race began to develop intellectually, morally and 
spiritually. And, if the era of hunger and cold shall 
ever return, it will drive from the thoughts of men 
everything that we now know of spirit, of morals, or 
of intellect. 

Wealth or no wealth? Comfort or no comfort? 
Education or no education? Progress or no progress? 
Art or no art? Civilization or no civilization? 

It is useless to complain of the endowments that 
nature has given or has failed to give to any of us. 
We may not have been given the brains or the ability 
or the talent ever to be leaders, but we may at least 
conquer our primitive instincts of wolfishness and 
thievery enough to enable us to accept the leadership 
and direction of those abler than ourselves and share 
in their prosperity. 

If you want to prosper get in line with those who 
prosper, that is, with those who produce. 

Wealth seeks the hands of those that give it its 
greatest use and activity, and labor of its own accord 
seeks employment where it can be directed by the best 
brains, because there it gets the better job, the best 
wages and lives the best. Who ever prospered by 
working with a business that failed? 

I have called attention to the fact that wealth is 



82 A DEFENCE OF WEALTH 

produced not by labor but by brains. The image or 
mark of the Caesars of Invention, of Transportation, 
of Business, is stamped upon every device of the civi- 
lization we enjoy today. Look at the things all about 
you by the use of which you live; whose image does 
it bear? Watt's, or Field's, or Edison's, or Rocke- 
feller's, or Carnegie's, or Armour's, or a hundred 
other names that I might mention. 

Do you complain that these men have enabled you 
to produce more and to live better than your fathers, 
or your grandfathers, ever dreamed of producing or 
living? Will you accept the leadership of those, who 
advise you to throw all this away and go back to living 
with only what you can make and do for yourself, or 
will you help preserve what you now enjoy, and if you 
use and enjoy the inventions and devices of other men, 
if you accept the service of their superior brains, if you 
seek their direction and leadership, because by so 
doing you do better for yourself, can you doubt the 
justice of paying tribute to them? 

There was in days of old a people who enjoyed 
peace at the hands of Caesar and in their peace they 
prospered. But they complained that out of their 
prosperity they had to pay tribute for the peace and 
protection that they enjoyed. They sent to a wise man, 
who they knew neither cared for nor feared any man, 
not even Caesar, and asked him what they should do. 
He asked them to look at the symbol of the peace and 
prosperity that they accepted and enjoyed and behold, 
it bore the mark of Caesar and he said : "Pay Caesar 
for that which you owe to Caesar." It was the way 
of Truth and Justice then and it remains so forever! 



LIBRARY OF CONGRESS 



The Book of tl 



013 742 100 8 • 



The Answer to all Red, Socialistic fropaganaa 



._J 



THE THINGS 
THAT ARE CAESAR^S 

A Defence of Wealth 
By GUY MORRISON WALKER 

* 'It is the great book of the times. It is the greatest book on 
wealth ever written. I think this work alone can accomplish the 
restoration of sanity with the public as respects property and cap- 
ital. Beside it Adam Smith's *' Wealth of Nations" is mud. 

—a W. Barron. 

* 'The best book of Philosophy I have ever read, truer and more 
important." — E. W, Howe, the Atchison Globe man. 

"Walker's Defence of Wealth is the most interesting and in- 
structive book of its kind that I have ever read." — W. E. Hazen, 
The Wall Street Journal. 

"It is the most interesting economic book I have ever read; it 
should be given wide publicity." — Chas. S. Calwell, President Corn 
Exchange National Bank, Philadelphia. 

'A Classic! It constitutes 'the writing on the wall' for the ex- 
tremists and radicals who would destroy the economic and industrial 
foundations of the world." — The Pekin Leader {China). 

"Send me a copy of The Things That Are Caesar's, for I know 
in advance that it is most valuable. I want everything that Guy 
M. Walker ever wrote or ever will write." — Leslie M. Shaw, Ex- 
Secretary of U. S. Treasury. 

Unabridged Edition - Price $1»00 . 
Abridged Edition - - Price $ .50 

A* L. FOWLE, 61 Broadway, New York 

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